BioScrip outlook positive following ‘unexpected’ merger, say Lake Street

Lake Street analyst Brooks O’Neil says BioScrip’s outlook remains positive despite Friday’s “disappointing” Q4 results and “unexpected” all-stock merger with Option Care. The combined company can deliver high single digit revenue growth and in the range of $175M of 2019 adjusted EBITDA pre- synergies, O’Neil tells investors in a research note. Further, while management has committed to $60M of synergies, the analyst thinks “there could be much more, certainly over several years.” His analysis can get to a $3.50 per share valuation for BioScrip “without stretching too far.” O’Neil keeps a Buy rating on the stock with a $3.50 price target.

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