Ensign Group initiated with a Buy at UBS

UBS initiated coverage of Ensign Group (ENSG) with a Buy rating and $175 price target Ensign is a proven operator with a strong track record of acquiring and turning around underperforming facilities, typically generating 330 basis points of margin improvement within five quarters post acquisition, the analyst tells investors in a research note. The firm says the majority of the company’s facilities have come through acquisitions and the fragmented nature of the skilled nursing facility industry allows for plenty of future acquisition opportunities. There are only a few operators in the sector poised to take advantage of the ongoing industry challenges, Ensign being one of them, contends UBS. It thinks the stock can see valuation expansion as investors start looking at the industry more post-pandemic.