Cross Country Healthcare initiated with "neutal"

12/23/03 - J.P. Morgan Securities

NEW YORK, December 23 (New Ratings) — Analysts at JP Morgan initiate coverage of Cross Country Healthcare, Inc (CCRN) with a “neutral” rating.

Shares of Cross Country Healthcare, a US-based healthcare staffing services provider, are currently trading at $14.50.

According to JP Morgan’s research note published this afternoon, Cross Country Healthcare is poised for robust earnings and revenue growth momentum in 2004, as compared to its peers. The analysts mention that the company’s recent Med-Staff acquisition is likely to become earnings accretive by next year. However, JP Morgan expresses its concern regarding the deteriorating demand trends for temporary healthcare staff in the US in the near term.

Cross Country Healthcare has successfully diversified its business model from the core travel nursing staffing services in the recent past, the analysts say. JP Morgan expects the company to benefit considerably from its broadened services portfolio in the long term. However, the current valuation of the company’s stock has limited upside potential, given the sluggish demand outlook for the US healthcare staffing market in the near term, the analysts believe.

The EPS estimates for 2003, 2004 and 2005 are $0.81, $0.80 and $0.91, respectively. The P/E estimates for 2003, 2004 and 2005 are 18.0x, 18.2x and 15.9x, respectively.

JP Morgan initiates coverage of Cross Country Healthcare, Inc (CCRN) with a “neutral” rating.