Morgan Keegan Has Outperform Rating On Allscripts Healthcare Solutions (MDRX)

Morgan Keegan has an Overweight rating and $24 price target on shares of Allscripts Healthcare Solutions, Inc. MDRX, as the company just closed its merger with Eclipsys. In the research report for investors, Morgan Keegan writes, "We have combined our Allscripts and Eclipsys models, and broken out quarterly results for 2009 and 2010. The historical results assume that the combined company had the same share count and capital structure as is in place today, for the sake of easier comparisons. The model does not have all of the normal line items, because there is limited pro forma information for the combined company. We plan to publish a more detailed model after Allscripts reports its September quarter results. Our estimate for the year ending December 2010 is $0.71, which is exactly in line with our prior estimate of $0.71 for standalone Allscripts in the twelve months ending November 2010. We are not assuming any significant cost or revenue synergies for the combined company in calendar 2010. Our estimate for the year ending December 2011 is $0.95, which is $0.08 higher than our estimate of $0.87 for the standalone Allscripts. The higher earnings estimate is a result of the $25 million of cost synergies that management has projected for calendar 2011. We are not assuming any significant revenue synergies." Morgan Keegan goes on to say, "We believe that shares of Allscripts trading at 18x our 2011 expectation are attractive relative to the peer group at 21x. The company has significant exposure to the government EHR program and management has a strong track record for driving cost synergies (which should drive significant earnings growth). We are maintaining an Outperform rating." Shares of MDRX lost 4 cents yesterday to close at $17.43.