Jefferies lowers Pediatrix Medical Group stock price target to $19 on eAPTC concerns

Investing.com - Jefferies lowered its price target on Pediatrix Medical (TASE:BLWV) Group (NYSE:MD) to $19.00 from $21.00 on Wednesday, while maintaining a Buy rating on the healthcare company’s stock. The company, currently trading at $14.02 with a market capitalization of $1.2 billion, maintains strong fundamentals with an EBITDA of $236.72 million over the last twelve months.

The price target reduction comes despite Pediatrix posting strong quarterly results, with EBITDA beats exceeding 20% for the last three quarters, which allowed the company to raise its fiscal year 2025 EBITDA guidance by $20 million at the midpoint.

Jefferies cited concerns about the lack of a clear path to extending the enhanced Advanced Payment Tax Credit (eAPTC) as the primary reason for the more conservative outlook, embedding a $19.3 million revenue and EBITDA headwind in its updated fiscal year 2026 estimates.

Despite the price target reduction, Jefferies raised its overall fiscal year 2026 estimates for Pediatrix, citing the company’s fiscal year 2025 outperformance as a contributing factor.

The firm remains bullish on Pediatrix Medical Group, pointing to the stock’s cheap valuation, strong execution, and significant share buyback opportunity as positive factors supporting the maintained Buy rating. Trading at a P/E ratio of 10.76x and generating a substantial free cash flow yield of 19%, InvestingPro analysis indicates the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.

In other recent news, Pediatrix Medical Group reported strong financial results for the second quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.53, which was higher than the forecasted $0.42, resulting in a 26.19% positive surprise. Revenue also slightly exceeded projections, coming in at $468.84 million against the anticipated $464.37 million. These results underscore the company’s solid performance during the period. While the stock saw significant movement following the announcement, this article focuses on the earnings and revenue outcomes. The earnings beat signals a positive trend for Pediatrix Medical Group, as noted by analysts. Investors may find these developments noteworthy as they reflect the company’s financial health.

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