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Investing.com - UBS initiated coverage on Ardent Health Partners Inc (NYSE:ARDT) with a Buy rating and a $17.00 price target on Wednesday. According to InvestingPro data, the company maintains strong financial health with a "GREAT" overall score and healthy liquidity metrics, as current assets exceed short-term obligations.
The hospital operator’s stock has declined 21.08% year-to-date, which UBS believes represents an overreaction to Medicaid payment reductions that will take more than a decade to fully implement. With a P/E ratio of 6.32x and EV/EBITDA of 6.95x, InvestingPro’s Fair Value analysis suggests the stock is currently undervalued.
Ardent Health Partners owns a portfolio of acute care hospitals with growth opportunities in its core commercial and Medicare business segments, which represent approximately 80% of the company’s revenue.
UBS notes that Ardent currently trades at a 4.5x EV/EBITDAR multiple based on 2026 estimates. Even if all supplemental payment benefits were removed from EBITDA calculations, the company would trade at a 6.0x multiple, still below the typical 7-9x range for hospital operators.
The firm views the current valuation as an attractive entry point for a company expected to deliver revenue growth comparable to peers while offering greater margin improvement potential than more established hospital operators.
In other recent news, Ardent Health Partners reported a strong second quarter for 2025, with earnings per share of $0.52, surpassing market expectations. The company’s revenue reached $1.65 billion, representing an 11.9% increase compared to the previous year. This performance was bolstered by the New Mexico Directed Payment Program approval, which provided a $65 million EBITDA benefit during the quarter. Excluding this benefit, Ardent’s core revenue growth was in line with management’s expectations, showing a mid-single-digit percentage increase year-over-year. In light of these results, JPMorgan has adjusted its price target for Ardent Health Partners, reducing it from $18.00 to $15.00, while maintaining a Neutral rating on the stock. These developments indicate ongoing investor interest and analyst attention towards the company’s financial performance and strategic initiatives.
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