) to buy from hold.
Analyst Sean Wieland says Cerner is well-positioned to win two of five U.K. National Health Systems regional contracts for revamping information-technology infrastructure worth an estimated $200 million to $400 million each in license and service revenue. Assuming 15% margin on business, he estimates each contract would benefit earnings per share by 12 cents to 23 cents over seven years. He notes Cerner is working with IBM and Schlumberger to win other regions.
Wieland says funding for the overall project remains a key concern that could delay implementation. He sees 32 cents third-quarter earnings per share, $1.16 for 2003, and $1.54 in 2004. He set a $37 target. Cerner also plans to acquire Beyondnow Technologies.