Citi raises Multiplan stock price target to $21, keeps neutral rating

On Tuesday, Citi analysts adjusted their outlook on Multiplan Co. (NYSE: MPLN), increasing the price target to $21.00 from the previous $12.50, while maintaining a Neutral rating on the company’s shares. The revision follows Multiplan’s recent fourth-quarter results and fiscal year 2025 guidance, which did not entirely meet the expectations of Citi and other consensus estimates. According to InvestingPro data, the stock has shown remarkable momentum with a 186.5% return over the past six months, though technical indicators suggest the stock may be in overbought territory.

Multiplan, recently rebranded as Claritev, has demonstrated double-digit growth in its new HST/BTS products. The company’s progress in its transformation plan is evident from a recent $34 million Total (EPA:TTEF) Contract Value (TCV) client signing and the renewal of a significant existing client contract without compromising on the economic terms. With a robust gross profit margin of 74.2% and an EBITDA of $557.7 million in the last twelve months, the company maintains strong operational efficiency. Get deeper insights into Multiplan’s financial health and 12 additional exclusive ProTips with InvestingPro.

Despite these positive developments, analysts anticipate that growth may still face challenges in 2025. Multiplan is expected to navigate through approximately $60 million in attrition and continue investing in its transformation plan. Details regarding these investments and their implications on the company’s strategy are provided within the analysis.

Citi’s stance remains cautious, with analysts expressing the need to observe a reacceleration in mid-single-digit revenue growth and stability in margins before adopting a more constructive view on Multiplan’s stock. The company’s ongoing efforts and future performance in these areas will be closely monitored to assess potential changes in the rating.

In other recent news, Claritev Corp reported mixed financial results for Q4 2024, with revenue reaching $232.1 million. For the full year, the company’s revenue totaled $930.6 million, marking a 3.2% decrease from the previous year. Despite a slight increase in analytics-based revenues, overall revenue decline and investor concerns led to a significant stock drop. Claritev has initiated a transformation program aimed at reducing operating costs by 10-15% and anticipates sequential revenue and EBITDA growth in 2025. The company renewed a large client for three years at the current value and is exploring new pricing strategies. Additionally, Claritev’s guidance for 2025 suggests a potential revenue decline of up to 2% or flat growth compared to 2024. Analyst firms have not provided any upgrades or downgrades at this time.

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