Zacks Investment Research Downgrades Cerner (NASDAQ:CERN) to Hold

Zacks Investment Research downgraded shares of Cerner (NASDAQ:CERN) from a buy rating to a hold rating in a report released on Monday morning, Zacks.com reports. The brokerage currently has $77.00 price objective on the stock.

According to Zacks, “Cerner exited the second quarter on a mixed note. The company continues to witness significant contributions from key areas like Population Health, Revenue Cycle and IT Works. Further, gains in the Licensed software, Professional and Managed Services units buoy optimism. International revenues also improved in recent times. Cerner is likely to benefit from electronic health record (EHR), electronic patient record (EPR) or electronic medical record (EMR) platforms that provide patient care in acute inpatient and outpatient settings. The stock outperformed the industry in a year. Meanwhile, Technology Resale, Support & Maintenance and Reimbursement Travel revenues declined year over year recently. Bookings also fell. Contraction in operating margins remains a concern. Furthermore, competition in the global MedTech space is a woe.”

Other equities research analysts also recently issued reports about the stock. Bank of America raised their target price on shares of Cerner from $70.00 to $77.00 and gave the company a buy rating in a research note on Tuesday, May 21st. Canaccord Genuity raised their target price on shares of Cerner from $77.00 to $80.00 and gave the company a buy rating in a research note on Thursday, July 25th. Robert W. Baird raised their target price on shares of Cerner from $67.00 to $71.00 and gave the company an outperform rating in a research note on Wednesday, April 10th. Citigroup raised their target price on shares of Cerner from $77.00 to $84.00 and gave the company a buy rating in a research note on Thursday, July 25th. Finally, Cantor Fitzgerald raised their target price on shares of Cerner from $75.00 to $85.00 and gave the company an overweight rating in a research note on Monday, July 8th. Two equities research analysts have rated the stock with a sell rating, three have given a hold rating and eleven have assigned a buy rating to the company’s stock. The stock presently has a consensus rating of Buy and a consensus target price of $73.36.

Shares of Cerner stock opened at $71.93 on Monday. Cerner has a 12-month low of $48.78 and a 12-month high of $76.47. The stock has a market capitalization of $23.43 billion, a P/E ratio of 32.55, a price-to-earnings-growth ratio of 2.11 and a beta of 0.89. The company has a debt-to-equity ratio of 0.22, a quick ratio of 2.50 and a current ratio of 2.52. The stock has a 50-day moving average price of $73.30.

Cerner (NASDAQ:CERN) last announced its quarterly earnings results on Wednesday, July 24th. The company reported $0.60 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.58 by $0.02. Cerner had a net margin of 10.75% and a return on equity of 15.14%. The firm had revenue of $1.43 billion for the quarter, compared to the consensus estimate of $1.44 billion. During the same period in the prior year, the firm posted $0.62 earnings per share. The company’s revenue for the quarter was up 4.6% on a year-over-year basis. As a group, equities research analysts expect that Cerner will post 2.43 EPS for the current year.

The company also recently announced a special dividend, which was paid on Friday, July 26th. Stockholders of record on Tuesday, June 18th were issued a $0.18 dividend. The ex-dividend date of this dividend was Monday, June 17th. Cerner’s dividend payout ratio is 32.58%.

In related news, EVP Julie M. Wilson sold 93,500 shares of Cerner stock in a transaction on Monday, May 20th. The shares were sold at an average price of $69.57, for a total value of $6,504,795.00. Following the sale, the executive vice president now owns 45,510 shares in the company, valued at $3,166,130.70. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CAO Michael R. Battaglioli sold 10,468 shares of Cerner stock in a transaction on Thursday, May 16th. The shares were sold at an average price of $69.09, for a total transaction of $723,234.12. Following the completion of the sale, the chief accounting officer now owns 8,226 shares in the company, valued at approximately $568,334.34. The disclosure for this sale can be found here. Insiders sold 441,468 shares of company stock worth $30,777,997 in the last 90 days. Company insiders own 0.75% of the company’s stock.

A number of large investors have recently added to or reduced their stakes in the stock. Norges Bank bought a new position in shares of Cerner during the 4th quarter valued at approximately $155,781,000. BlackRock Inc. boosted its position in Cerner by 8.4% during the first quarter. BlackRock Inc. now owns 23,927,386 shares of the company’s stock valued at $1,368,887,000 after purchasing an additional 1,848,617 shares in the last quarter. Parnassus Investments CA boosted its position in Cerner by 15.6% during the first quarter. Parnassus Investments CA now owns 11,361,322 shares of the company’s stock valued at $649,981,000 after purchasing an additional 1,531,499 shares in the last quarter. MERIAN GLOBAL INVESTORS UK Ltd boosted its position in Cerner by 25.7% during the first quarter. MERIAN GLOBAL INVESTORS UK Ltd now owns 3,324,449 shares of the company’s stock valued at $190,191,000 after purchasing an additional 680,664 shares in the last quarter. Finally, Wedge Capital Management L L P NC bought a new stake in Cerner during the second quarter valued at about $43,613,000. Institutional investors and hedge funds own 81.47% of the company’s stock.

About Cerner

Cerner Corporation provides health care information technology solutions and tech-enabled services in the United States and internationally. The company offers Cerner Millennium architecture, a person-centric computing framework, which includes clinical, financial, and management information systems that allow providers to access an individual's electronic health record (EHR) at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers.

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