DVA - DaVita upgraded to buy at UBS on growth prospects

• UBS has upgraded DaVita ( NYSE: DVA ) to buy from neutral citing its ability to deliver EPS growth in the coming years.
• The firm upped its price target to $117 from $106 (~31% upside based on Thursday's close).
• Analyst Andrew Mok said he is confident the company can deliver $200M-300M of OI growth in 2023 and is modeling ~$1.8B EBIT.
• He added that the potential passage of the Restore Protections for Dialysis Patients Act could also benefit the company.
• Mok noted that a contract with Amgen ( AMGN ) for Epogen (epoetin alfa), a drug given to patients with chronic kidney disease on dialysis, is set to expire leading to renegotiation that will likely lead to cost savings.
• But he added DaVita is already piloting a program for its at-home dialysis patients to Vifor Pharma's ( OTCPK:GNHAY ) Mircera (methoxy polyethylene glycol-epoetin bets). Mok believes the company may transition to in-center patients in January 2023.
• The switch to Mircera could lead to $140M in annual cost savings, according to Mok.
• Seeking Alpha's Quant Rating views DaVita ( DVA ) as a hold with an "A" for profitability .

For further details see: