Why BofA Is Double Downgrading Cerner: ‘Not Much Room For Upside’

Cerner Corporation’s (NASDAQ: CERN) long-term growth is likely to be slightly lower than was earlier anticipated, and there is lack of a “possible novel catalyst” to drive share price appreciation, according to BofA Securities.The Cerner Analyst: Michael Cherny downgraded Cerner from Buy to Underperform and lowered the price target from $82 to $76.The Cerner Thesis: The company is still among the market leaders across health IT and electronic health records, Cherny said in a Tuesday downgrade note.Cerner could sustain growth and leverage its installed base to move into more strategic growth areas “over a multiyear period,” the analyst said. Additional contributions from the rollout of the company’s Veterans Affairs contract should also support double-digit growth, he said.These catalysts are already well-understood, and the next opportunity for upside is unclear “given the maturity of the traditional core business and the longer-dated potential contribution from the newer growth opportunities,” Cherny said. “Additionally, we see CERN’s valuation as not necessarily stretched but also not leaving much room for upside vs. its multi-year average. We do not foresee meaningful stock downside from here but also do not have enough upside to warrant a more constructive stance.”CERN Price Action: Shares of Cerner were down by 0.94% at $79.46 at last check. Cerner headquarters. Photo by Americasroof via Wikimedia. Latest Ratings for CERN DateFirmActionFromTo Jan 2021B of A SecuritiesDowngradesBuyUnderperform Oct 2020Deutsche BankMaintainsBuy Oct 2020Wells FargoMaintainsOverweight View More Analyst Ratings for CERN View the Latest Analyst RatingsSee more from Benzinga * Click here for options trades from Benzinga * JPMorgan Upgrades Hewlett Packard Enterprise On Valuation * Why KeyBanc Is More Bullish On Box Than Dropbox(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.