Mizuho sets Select Medical stock with Outperform, $25 target

On Wednesday, Mizuho (NYSE:MFG) initiated coverage on Select Medical (TASE:BLWV) Holdings Corporation (NYSE:SEM) with an Outperform rating and set a price target of $25.00 per share. The firm’s outlook on the stock is based on Select Medical’s strong position in the healthcare sector, particularly in post-acute care services. The company, currently valued at $2.1 billion, is trading at a relatively high P/E multiple of ~50x, according to InvestingPro data.

Select Medical’s growth prospects were highlighted as a key factor for the positive rating. Mizuho pointed to the company’s diversification and its expansion into the rapidly growing inpatient rehabilitation market. These strategic moves are expected to provide solid earnings visibility for Select Medical, which currently generates annual revenue of $5.19 billion and maintains a healthy free cash flow yield of 14%.

The analyst at Mizuho also noted the potential for margin expansion within Select Medical’s outpatient rehabilitation services. This potential is seen as a contributing factor to the company’s attractive growth profile. InvestingPro analysis reveals several positive indicators, including expected net income growth and a strong track record of returns over the past five years. Subscribers can access 6 additional exclusive ProTips and comprehensive financial metrics for deeper analysis.

Additionally, Mizuho believes there is room for upside in Select Medical’s stock value. This could be driven by faster-than-expected growth in the inpatient rehabilitation sector. The company’s strategy for deploying free cash was also mentioned, with share repurchases or potential mergers and acquisitions (M&A) activities being possible uses that could create additional value for shareholders.

In summary, Mizuho’s coverage on Select Medical reflects a strong belief in the company’s market leadership, growth strategy, and financial health. The Outperform rating and $25.00 price target underscore the firm’s confidence in Select Medical’s future performance and investment potential.

In other recent news, Semperit reported a profit of €11.5 million for Q4 2024, a significant improvement from a €17 million loss in 2023. Despite this positive earnings report, the company’s revenue remained flat at €1.31 billion, falling short of forecasted expectations of €1.55 billion. The earnings per share, however, exceeded analyst projections at €0.18, compared to the anticipated €0.16. Semperit has focused on strategic cost reductions and high-margin markets, which resulted in a 21.1% increase in EBITDA, reaching €84.9 million. Looking forward, the company has projected an operational EBITDA between €70-90 million for 2025. The company has also reduced its net debt to €103 million, equating to 1.2 times EBITDA. Additionally, Semperit plans to continue its strategic growth with capital expenditures of approximately €60 million in 2025. Furthermore, the company aims to achieve a long-term EBITDA of €120 million by 2026.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.