Citigroup Raises PT On Universal Health Services To $62

Citigroup has published a research report on Universal Health Services UHS and introduces new estimates for 2013.

In the report, Citigroup writes "We are updating our financial model for UHS and introducing 2013 estimates. We are also raising our 12-month target price from $53 to a street-high $62. The target and estimates reflect our conviction that UHS' strategic acquisition of PSYS will drive sector margin out performance once the company anniversaries Summer 2011 Medicaid rate reductions. We are raising 2011/2012/2013 from $3.57/4.00/na to $3.64/4.10/4.82. Our 2013 estimate is 20c above current consensus and reflects our conviction that UHS will close the 200bp+ PSYS margin gap between the companies. We believe risk management and quality assurance are core competencies at UHS. We expect this will have impact on revenue as well as margins and quality. We have not yet assumed any benefit of an amended bank agreement."

Citigroup maintains its Buy rating and has raised the price target from $53 to $62.

Universal Health Services closed Friday at $47.07.