Imperial Capital Cuts Price Target Following Stericycle Inc's (SRCL) 10c EPS Miss

Imperial Capital maintained an In-Line rating on Stericycle (NASDAQ: SRCL), and cut the price target to $135.00 (from $150.00), following the company's 3Q earnings results. Adjusted EPS totaled $1.08, $0.10 below consensus. The $0.10 miss vs.
consensus was attributed to higher fees and costs.

Analyst Scott Levine commented, "Guidance reflects consistent legacy SRCL growth, industrial pressure, and Shred-it accretion.
SRCL guided to adjusted FY15 EPS of $4.38-4.41, down from $4.64-4.69 previously, and below our at-consensus $4.67 estimate, as headwinds from industrial/project waste, FX, and higher cost offset recent acquisitions, RMS, and legacy SRCL growth consistent with recent levels. For FY16, SRCL introduced preliminary cash (excluding acquisition-related amortization) EPS guidance of $5.28-5.33, implying 13% growth yoy, reflecting 10% accretion from Shred-it, and 3% from legacy SRCL (7% after excluding tax ($0.12 headwind) and FX ($0.04) headwinds), as consistent growth in the traditional SRCL businesses is being dampened by pressure in industrial/project business. We are adjusting our estimates to include Shred-it, and lowering our FY15E EPS by 6% to $4.38, and are maintaining our FY16E EPS of $5.32, though this is now reflected on a cash basis, to conform with guidance. Our FY15 FCF falls by 7%, to $420mn, while FY16 FCF increases by 4% to $475mn, reflecting 13% yoy growth, due in large part to the inclusion of Shred-it in our model."

For an analyst ratings summary and ratings history on Stericycle click here. For more ratings news on Stericycle click here.

Shares of Stericycle closed at $149.04 yesterday.

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