In a research update to clients this morning, Broughton maintained her “Buy” rating and one year target price of (U.S.) $9.50 on Nobilis.
This morning, Nobilis announced that its current executive chairman of the board of directors of the company, Harry Fleming, will become CEO of the company, effective immediately. The company said Chris Lloyd has resigned as CEO of the company, effective Jan. 6, 2016.
“The company appreciates the hard work Chris has performed for the company in 2015 and wishes him the best of luck in his new endeavours,” said Fleming. “The management team is excited to roll out its plans for 2016 which will continue the growth and innovation we have displayed in the past three years. With our third quarter financials close to release we will be able to articulate our plans in more detail in the very near future.”
Broughton thinks the reasons behind the news are of a personal nature.
“Nobilis surprised the street with the announcement of Mr. Lloyd’s resignation in advance of the release of Q315 results,” she says. “We believe the turmoil and stress of events this fall and their impact on Mr. Lloyd’s health were material in his resignation. Nobilis and Mr. Lloyd have signed a formal separation agreement and there are no legal disagreements / lawsuits. Mr. Lloyd stated he is not selling his shares.”
Broughton thinks Nobilis’s Q3, 2015 results are now “imminent”. She also believes there are several near-term catalysts for the company, including the release of the restated 2014, Q115 and Q215 financials, the release of the Q3, 2015 financials, and the pre-release of the Q4, 2015 revenue, noting that the company has guided full year revenue of (U.S.) $233-million.
Shares of Nobilis Health on the NYSEMKT closed today down 20.3 per cent to $2.47.
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