SGRY - Surgery Partners a buy says Stifel on organic growth expense management

Stifel has upgraded Surgery Partners (SGRY +3.2%) to buy from hold given the company's organic growth, expenser management, and improvement in investment and balance sheet. The firm has a price target of $51 (~17% upside). "We believe the secular trend of surgical procedures moving to outpatient settings (ambulatory service centers in particular) is accelerating, and SGRY management has positioned the company to capitalize on the growth opportunities ahead of it," writes analyst Tao Qiu. Qiu called the company's recent Q3 results "a testament of ASC resilience in the pandemic," adding that growth in outpatient surgeries will continue. Stifel has 2023 estimated revenue/adjusted EBITDA of $2.74B/$419M, and revenue growth between 2021 and 2023 at a CAGR of 10%. Surgery Partners recently had a $279M stock offering.

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Surgery Partners a buy, says Stifel, on organic growth, expense management