Goldman Says DaVita Top Buy (DVA)

Goldman Sachs has a Buy rating on DaVita Inc. DVA, and says it is one of its top ideas in the healthcare sector. In a note sent to clients, Goldman writes, "Our best buy ideas in Healthcare range across a variety of different themes from small cap growth to under appreciated earnings leverage stories. Over the course of 2011, we think the following five stocks will ultimately deliver the most upside to our price targets. Note: we highlight DVA as a top idea, though the path to share appreciation may not be as linear as other names included on our Conviction Buy list; and top idea CVS falls outside our Conviction sector." Goldman writes, "DVA is an attractive secular growth story with a near-term catalyst to drive shares higher. We view stable 4% annual dialysis treatment volume growth as particularly attractive in the midst of an economy-driven multi-year slowdown in healthcare volumes industry-wide. Meanwhile, our research and results of our physician survey support our expectation that DVA will trim Epogen (Epo) utilization by 20% in 2011 and another 10% in 2012, driving EBIT above Street expectations."