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Investing.com - Jefferies initiated coverage on The Pennant Group (NASDAQ:PNTG) with a Buy rating and a $30.00 price target on Friday. The stock, currently trading at $24.48, appears undervalued according to InvestingPro analysis.
The investment firm expressed optimism about the home health sector, citing its cost-effectiveness and preference among patients and physicians as factors that position it for market share gains.
Jefferies highlighted Pennant Group’s potential for low-teens EBITDA growth, which it attributes to broader industry tailwinds and strong management execution.
The firm noted that Pennant’s current valuation already reflects a 6.4% rate cut, suggesting potential stock upside if the actual rate reduction proves less severe than anticipated.
Pennant Group operates in the home health and hospice segments, with Jefferies positioning the company as an attractive investment option for those looking to capitalize on growth in the home health care space.
In other recent news, Pennant Group Inc. reported its second-quarter 2025 earnings, revealing a revenue increase to $219.5 million, which exceeded the forecasted $210.59 million. The earnings per share (EPS) met analysts’ expectations at $0.27. In a strategic move, Pennant Group acquired home health, hospice, and personal care operations from UnitedHealth Group for $146.5 million, expanding its footprint with 54 new locations primarily in Tennessee, as well as facilities in Georgia and Alabama. This acquisition was part of an antitrust settlement involving UnitedHealth and Amedisys Inc. Analysts at RBC Capital have responded to these developments by raising their price target for Pennant Group to $34 from $33, maintaining an Outperform rating. Meanwhile, Truist Securities has reiterated a Hold rating on the company’s stock with a $28 target, following management meetings that highlighted Pennant Group’s market positioning and recent acquisition activity. These developments underscore the company’s growth strategy and its positioning within a strong demand environment.
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