Patterson To Benefit From Improving Utilization Across Its Segments

Analysts at Jefferies & Co initiate coverage of Patterson Companies PDCO with a "buy" rating. The target price for PDCO is set to $36. According to Jefferies, “Patterson should benefit from improving utilization in all three segments while remaining fairly immune to headline risks associated with a changing healthcare landscape, making it one of the better positioned companies to deliver improved future earnings growth… While a recovery is not being factored into either ours or management's forecasts, we believe there is potential for $0.04-0.06 upside once the consumer environment begins to improve.” “Patterson's EBIT margin exceeds that of any other healthcare distributor by 300+ bps, due in large part to contribution from the higher-margin Medical (rehabilitation) segment. In our opinion there is still room for significant expansion in the Medical segment operating margins to the 17%-18% range as the business matures… We believe PDCO's expertise in the dental equipment business positions it best to evolve the vet equipment market,” the analysts mention. More Analyst Ratings here