Zacks Investment Research downgraded shares of Healthways Inc. (HWAY) from NEUTRAL to UNDERPERFORM on January 13, 2014, with a target price of $14.00.
We have downgraded our recommendation to Underperform from Neutral following the company's disappointing third-quarter 2013 results, where earnings per share significantly dipped 66.7% to $0.05 from the year-ago level and missed the Zacks Consensus Estimate by $0.06. Revenues of $166.6 million also lagged the Zacks Consensus Estimate of $185 million. As a result, the company lowered its 2013 top and bottom lines guidance. Growth in the U.S. is expected to slow down, and total number of billable lives may stagnate, which will be partly offset by cross-sell opportunities. Also, on the tepid side, Healthways considers itself to be a global well-being company though overseas contract wins have been restricted to just a few countries. Our target is $14.00.
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