Morgan Keegan Raises PT On HLS To $32

Morgan Keegan, citing a first quarter above estimates, is raising its price target from $29.25 to $32 and is maintaining its Outperform rating on HealthSouth Corp. HLS. Says Morgan Keegan, in the report, “HealthSouth reported stronger-than-expected first quarter earnings and announced, as we expected, the partial call of its $496 million 10.75% senior notes. We are accordingly raising our 2011 EPS estimate from $1.09 to $1.18, our 2012 estimate from $1.38 to $1.40, and our price target from $29.25 to $32. We are reiterating our Outperform rating… We believe HealthSouth remains on track to grow in 2011 from a combination of internal growth, balance sheet deleveraging, and selective acquisitions and developed hospitals. We believe our projections, while above management's guidance, are conservative.” HLS closed at $24.72 yesterday.