CIBC World Initiates Odyssey HealthCare with Strong Buy

Analyst Charles Lynch expects expansion of the hospice care industry to continue

CIBC World initiated investment coverage of Odyssey HealthCare (ODSY ), which provides hospice care to the terminally ill, with a strong buy rating. The firm also set a $25 price target on Odyssey shares.

Analyst Charles Lynch told Standard & Poor's MarketScope that Odyssey is the second-largest provider of hospice service in the U.S.; the company has grown rapidly since its formation in 1995, expanding its revenue base from $1 million in 1996 to an estimated $128 million in 2001and $164 million in 2002. Lynch notes the hospice industry is a relatively small part of the broader healthcare services industry; he sees expenditures for end-of-life services at about $4.2 billion this year. Lynch expects industry expansion to continue, driven by the aging of the U.S. population, increased recognition of the availability of end-of-life service, and other factors. He sees Odyssey posting EPS of $0.78 in 2001, rising to $0.95 in 2002.

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