Wachovia upgraded Amsurg (AMSG) to outperform from market perform, explaining that internal growth should improve in the first quarter.
Analyst William Bonello noted a recovery at many problem centers and strong physician recruitment. He says that the company has indicated 14 of its 16 underperforming centers have either stabilized or returned to positive growth. He estimates that these problem centers cut the company's earnings per share (EPS) by 2 cents in the fourth quarter. He thinks the company was able to recruit twice as many physicians in 2005 vs. 2004. He expects these doctors to become increasingly productive in 2006. He says first quarter visibility is decent, given strong acquisition activity and an improving pipeline. He sees $1.26 2006 EPS.