Piper Jaffray Raises Estimates for Psychiatric Solutions
Psychiatric Solutions (PSYS ) increased its 2004 earnings per share guidance from $1.00 to $1.04 to $1.08 to $1.13. Piper Jaffray raised its estimates and price target on the news.
Analyst Darren Lehrich says the company raised its 2004 guidance after closing the Heartland Healthcare deal, which adds 4 facilties to the company's base of inpatient psychiatric hospitals. The company now operates 32 facilties with 3,800 beds.
Lehrich notes that the company earlier had said the deal would be accretive, but EPS accretion was slightly higher than he expected. As such, he ups his $1.04 2004 EPS estimate to $1.08, $1.28 2005 EPS to $1.34, and $26 price target to $27.
He notes, concurrent with the closing of the Heartland deal, Psychiatric Solutions said it amended and increased its revolving credit facility to $125 million from $50 million. He reiterated an outperform rating.