Odyssey HealthCare Fairly Priced

Fri. October 31, 2008; Posted: 07:10 AM

Oct 31, 2008 (Zacks Investment Research via COMTEX) -- ODSY | Quote | Chart | News | PowerRating -- Odyssey HealthCare (ODSY) is a major provider of hospice services in the U.S., with a presence in 30 states. The company reported better-than-expected 3Q08 net income of $5.9M, or EPS of $0.18 (excluding $0.6M of one-time after-tax costs and a $2.1M pretax benefit from a reduced cap accrual), compared with net income and EPS of $3.1M and $0.09, respectively, in 3Q07. As in the previous quarter, the result was characterized by a number of expenses related to the integration of the Vistacare acquisition, which we expect to continue into 4Q08. Potential Vistacare synergies aside, we believe Medicare-related reimbursement risk remains high at this time and retain our Hold recommendation on the stock at current levels.We have valued Odyssey HealthCare on a forward price/earnings (P/E) basis, as well as a comparison to similar firms in the healthcare facilities sector. Our $9 target price is derived using a multiple of 14x FY09 EPS of $0.64.Read the full analyst report on ODSY

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For full details on Odyssey Healthcare Inc (ODSY) click here. Odyssey Healthcare Inc (ODSY) has Short Term PowerRatings of 5. Details on Odyssey Healthcare Inc (ODSY) Short Term PowerRatings is available at This Link.

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