UBS upgraded DaVita stock to "buy," the first bullish stance on the dialysis stock
The shares of dialysis machine maker DaVita Inc (NYSE:DVA) are 6.6% higher to trade at $115.36 this morning, and earlier hit an 18-month high of $116.52. The breakout comes after UBS upgraded DVA to "buy" from "neutral" and hiked its price target to $142 from $100, telling clients in a note that it sees "tailwinds that support our Street-high earnings estimates and contrarian 'buy' rating."
Thanks to a post-earnings bull gap of 7.1% on Friday and today's gains, DaVita stock is now up 55% year-to-date and 35% year-over-year. Prior to the two-session breakout, the shares had support in place at their ascending 50-day moving average. This trendline caught pullbacks in the last two months and hasn't been breached on a closing basis since late March.
This is the stock's first "buy" rating among the brokerage bunch; coming into today, all seven brokerages rated DaVita stock a "hold" or "sell." Plus, the 12-month average target price of $112 remains a roughly 1.8% discount to the equity's current perch.