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Investing.com - UBS upgraded Aveanna Healthcare Holdings Inc (NASDAQ:AVAH) from Sell to Neutral on Tuesday, while raising its price target to $8.00 from $6.75. The stock, currently trading at $7.04, has shown remarkable strength with a 54% gain year-to-date. According to InvestingPro data, the company maintains a GREAT Financial Health score.
The upgrade reflects improved visibility on Aveanna’s leverage trajectory and better understanding of the impacts of the company’s interest rate swaps and caps, according to UBS.
The firm noted greater clarity on Aveanna’s earnings drivers, which will be more focused on execution of its preferred payer strategy and opportunities for additional efficiency gains in segments and SG&A, rather than Medicaid reimbursement rates as states face tightening budgets.
UBS highlighted that Aveanna’s outsized earnings performance year-to-date creates a trajectory allowing the company to accelerate its path toward a reasonable leverage ratio, projecting it will reach the mid-4x range by 2026.
The firm also pointed out that Aveanna is trading at 10.5x EV/EBITDA, well below its historical average of approximately 12x, with the expected material reduction in leverage potentially removing a previous impediment for investors.
In other recent news, Aveanna Healthcare Holdings Inc. reported impressive financial results for the second quarter of 2025, surpassing market expectations. The company achieved earnings per share of $0.18, which was significantly higher than the forecasted $0.04, representing a 350% surprise. Revenue also exceeded projections, reaching $590 million compared to the anticipated $533.92 million, a 10.43% increase. Following these robust earnings, Raymond (NSE:RYMD) James upgraded Aveanna Healthcare’s stock rating from Market Perform to Outperform, setting a price target of $9.00. This upgrade was influenced by the company’s strong second-quarter performance, which exceeded both company guidance and consensus forecasts. These recent developments highlight Aveanna Healthcare’s financial strength and have garnered positive attention from analysts.
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