Stock Insights: Universal Health, FedEx, Express Scripts, Groupon, Altera June 5th
Universal Health Services Inc. (NYSE:UHS): Deutsche Bank believes Universal Health acquired a high quality asset in Ascend Health and believes the recent pullback in shares provides a compelling entry point. The firm reiterates a Buy rating on the stock with a $56 price target.
FedEx Corporation (NYSE:FDX): Deutsche Bank found FedEx’s one cent dividend increase as disappointing since it believes the company’s balance sheet and cash flows can support a materially higher dividend. However, Deutsche thinks the company’s accelerated aircraft retirements set the stage for a U.S. Express restructuring this fall, which it feels could lead to a meaningful dividend increase so long as a large acquisition is not pursued. Deutsche Bank reiterates a Buy rating on FedEx shares with a $123 price target.
Express Scripts Inc. (NASDAQ:ESRX): Citigroup believes Medco’s loss of Assurant Health to Aetna (NYSE:AET) following its merger with Express Scripts (NASDAQ:ESRX) should be manageable as it represents less than 0.3% of Citi’s estimated 2013 revenue for Express Scripts. Citigroup notes that Express Scripts management indicated on its Q1 call that it expected some business attrition. The firm keeps a Neutral rating on shares of Express Scripts.
Groupon Inc (NASDAQ:GRPN): After meeting with Groupon’s investor relations, Benchmark Co. maintains a Buy rating on Groupon shares with a $20 price target. The firm says the company’s IPO lock-up has been a major overhang on the stock but expired last Friday, and continues to believe its market opportunity remains enormous.
Altera Corp. (NASDAQ:ALTR): UBS expects Altera to report an in-line Q2 due to a recovery in Chinese carrier spending but lowered 2H 2012 estimates given the weaker macro environment. The firm maintains its Buy rating and lowers its price target to $40 from $42.50.
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