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On Friday, Citi analysts, led by Daniel Grosslight, adjusted their stance on Agilon Health Inc (NYSE:AGL), upgrading the stock’s rating from Buy to Buy with a High Risk qualifier, while also raising the price target to $5.00, up from the previous $3.25. The stock currently trades at $3.82, having surged an impressive 48% over the past six months, according to InvestingPro data. The upgrade is based on the company’s effective risk reduction strategies for the year 2025 and the anticipation of accelerated margin improvement in 2026 and 2027. This outlook is bolstered by the final rate notice for calendar year 2026, which showed a 5% increase, approximately 300 basis points above the Advanced Rate.
The analysts believe that the approximately 30% decline in Agilon Health’s stock price following the earnings report of UnitedHealth Group (NYSE:UNH) was an overreaction. Discussions with Aledade co-Founder and CEO Farzad Mostashari have provided Citi with confidence that the issues impacting UNH’s Optum strategy may not be as relevant to Agilon Health. This view is supported by the company’s strong revenue growth of 40.4% over the last twelve months, as reported by InvestingPro. The analysts suggest that Agilon Health possesses a clearer ability to manage risk across various plans, especially when there is significant switching among national insurers.
Citi’s new price target of $5 for Agilon Health reflects a four times multiple on the firm’s projected fiscal year 2026 medical margin, which aligns with that of its peers. However, this valuation still represents a roughly 40% discount compared to Agilon Health’s trading levels prior to the volatility experienced by the Medicare Advantage industry. InvestingPro analysis indicates the stock is currently trading at a low revenue valuation multiple, with additional valuation insights available in the comprehensive Pro Research Report.
The upgrade and new price target take into account not only the company’s current performance but also its strategic positioning for the coming years. Citi’s analysis indicates a positive outlook for Agilon Health’s financial prospects and market performance. According to InvestingPro data, analyst targets for the stock range from $2 to $8.50, with the company’s Fair Value assessment suggesting potential upside from current levels.
In other recent news, agilon health has been the subject of significant analyst attention and adjustments to its financial projections. Bernstein upgraded agilon health’s stock rating to Outperform, raising the price target to $8.50 from $3.30, citing increased confidence in the company’s turnaround plan and recovery in the Medicare Advantage industry. In contrast, Truist Securities maintained a Hold rating while lowering revenue forecasts for 2025 and 2026, expecting revenues of $5.9 billion and $6.2 billion, respectively. Benchmark analysts raised the price target to $4.00 and maintained a Buy rating, highlighting agilon health’s strategic moves, including leaving unprofitable partnerships and gaining new members. Stifel also adjusted their outlook, increasing the price target to $3.00 while emphasizing the company’s shift toward profitability over growth. Agilon health’s recent earnings and strategic initiatives have prompted varied analyst perspectives, reflecting both optimism and caution regarding its future financial performance.
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