Merrill Upgrades Stericycle To Buy

Bank of America's (NYSE: BAC) Merrill Lynch boosted its rating on medical waste services firm Stericyle (NASDAQ: SRCL). The stock is now a buy, according to Merrill, lifting it from the former underperform territory.

The bank’s move was due to the company receiving regulatory approval for the acquisition of MedServe. Although the acquisition did not come as a surprise, the bank liked the fact that the approval was not conditional on restrictions of future domestic acquisitions. The bank’s former underperform rating was due to expectations of such restrictions being imposed on the firm.

Merrill said that such acquisitions could be critical for the company, which has derived 30-35% of past revenue and EPS growth from domestic transactions.

Shares of Stericycle are up $1.15 to $58.06 in late afternoon trading.