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Medical Facilities Corp. is still a buy, Industrial Alliance says

A new CEO at Medical Facilities Corp. (Medical Facilities Corp. Stock Quote, Chart, News: TSE:DR) is an expected development that isn’t changing Industrial Alliance Securities analyst Neil Linsdell’s bullish take on the stock.

On Tuesday, Medical Facilities Corp. announced that former COO Robert Horrar would become its new CEO.

“I am honoured to assume leadership of Medical Facilities during such an exciting time of change and opportunity in the industry,” Horrar said. “The company has successfully evolved to meet the ever-changing demands of the U.S. health care environment and is in an excellent position to achieve both organic and acquisitive growth. In tandem with our hospital and centre leadership and physician partners, I look forward to further building shareholder value.”

Linsdell says this announcement did not catch him off-guard.

“We had expected the appointment of a permanent CEO before the end of the year, and suspected that it would be an internal promotion of either Rob Horrar, or Chief Development Officer, Jim Rolfe, so this announcement comes as little surprise and does not alter any of our expectations or forecasts,” the analyst says. “We still expect to see acquisitions over the next few months and quarters as MFC continues to build out its network of specialty surgical hospitals, ambulatory surgical centres, and urgent care facilities. As we run through the end of the year, which is typically MFC’s strongest season, we expect the increased certainty related to a permanent CEO to resonate well with investors.”

In a research update to clients today, Linsdell maintained his “Buy” rating and one-year price target of $20.00 on Medical Facilities Corp., implying a return of 39 per cent at the time of publication.

The analyst thinks the company will generate EBITDA of $99.9-million on revenue of $388.4-million in fiscal 2017. He expects those numbers will improve to EBITDA of $116.1-million on a topline of $407.4-million the following year.

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Nick Waddell

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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