Wells Fargo Lowering Estimates On Alliance HealthCare Services (AIQ)

Wells Fargo Securities is lowering its earnings estimates on Alliance HealthCare Services, Inc.AIQ after the company reported earnings. It has a $5-7 price target on shares. In the research report, Wells Fargo writes, "On Thursday, August 19, we hosted investor meetings for Alliance Healthcare senior management. Topics discussed include its strategic plans to transform AIQ into a business increasingly focused on growth in radiation oncology while maintaining cash flow generation from its matured MRI and PET/CT businesses. We are lowering our 2010E EPS to a loss of $0.08 from a loss of $0.07. Stability in its MRI business in Q2 2010 is sustainable according to the company. AIQ's MRI revenue gap turned positive in Q2 for the first time in two years. Management noted a hired consultant reorganized its MRI sales force resulting in a greater number of wholesale contract renewals. It has been able to incent customers to extend contracts for multiple years at current prices. We believe, stabilization of MRI along with recent acquisitions increases the probability that management will increase its revenue guidance when it reports Q3 results." Shares of Alliance HealthCare Services, Inc. are up 8 cents this morning to $4.75.