Premier cut to Neutral at Baird after quarterly miss
Michael M. Santiago
- Baird downgraded Premier, Inc. (NASDAQ:PINC) to Neutral from Outperform, lowering its price target to $30 from $43 per share on Wednesday after the group purchasing organization reported worse than expected financials for Q3 FY23 and cut its full-year outlook.
- The stock lost ~19% on Tuesday as financials indicated the company’s second guidance cut this year, prompting Raymond James to downgrade the stock to Market Perform from Outperform.
- “If ever there was a quarter not to miss revenue, this was it. The market had every reason to expect better,” Baird analyst Eric Coldwell wrote, adding “yet another choppy, noisy, mishandled quarter and guidance cut.”
- According to the analyst, the stock trades at 10.5x and 6.4x on Baird’s next 12-month (NTM) estimates for earnings and EBITDA, compared to the five-year average of 13.6x and 8.6x, respectively.
- “If shares weren’t so inexpensive or down another 19%, we’d go to Underperform rating,” Coldwell added, detailing reasons for his Neutral rating.