First Albany upgrades healthcare management systems company Omnicell (OMCL ) to buy from neutral.
Analyst Glenn Garmont says he believes improved revenue visibility and ongoing market share gains position Omnicell shares for relative outperformance over the next 12 to 18 months.
He says, assuming incremental 50% penetration into HCA's 190 facilities, he estimates the sole-source OptiFlex contract announced Tuesday could be worth upward of $20 million over the next 24 months (95 facilities times $200,000 per system). He notes its earnings per share impact is likely to be higher, given OptiFlex is a higher-margin software product.
Garmont keeps his 2005 estimate at breakeven, and raises his 20 cents 2006 earnings per share to 33 cents earnings per share. He sets an $11 target.