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On Thursday, BofA Securities adjusted its outlook on Max Healthcare Institute Ltd (MAXHEALT:IN), increasing the price target to INR1,170 from INR1,100. The firm maintained a Neutral rating on the healthcare provider’s shares. BofA Securities’ analysis highlighted that Max Healthcare’s consolidated EBITDA stood at Rs5.9 billion, which was 6% below their expectations. This shortfall was attributed to lower EBITDA in the company’s existing network and new units, with revenue marginally under the firm’s estimates.
Max Healthcare’s ongoing organic expansion was recognized as a positive factor, noting the company’s plan to add 30% more beds by FY26, primarily through brownfield projects. Additionally, the progress in the facility recently acquired by Max Healthcare contributes to BofA Securities’ confidence in the company’s potential for higher EBITDA growth in FY26.
Despite the increase in the price target, the firm pointed out that Max Healthcare’s valuation at 27 times FY27 EV/EBITDA already accounts for the anticipated growth momentum. BofA Securities suggests that for their EBITDA growth projection of over 30% in the coming years to hold, sustained inpatient volume in the existing network and margin expansion in the acquired facilities will be critical.
The report by BofA Securities serves as an update to investors following Max Healthcare’s financial performance and strategic developments. As the company continues to expand and optimize its operations, the market will keep a close eye on its ability to achieve the growth and efficiency necessary to meet these financial expectations.
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