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Investing.com - Leerink Partners has raised its price target on Pediatrix Medical Group (NYSE:MD) to $17.00 from $14.50 while maintaining a Market Perform rating. The stock, which has delivered an impressive 58% return over the past year, currently trades near its 52-week high of $17.67. According to InvestingPro analysis, the company appears undervalued based on its comprehensive Fair Value model.
The research firm’s July Birth Tracker indicates births declined 0.5% year-over-year, down from June levels of 2.6% growth. In Florida, commercial births increased 11.1% year-over-year in July, largely offset by a decline in self-pay births. Despite these mixed trends, InvestingPro data shows the company maintains healthy financials with a strong current ratio of 1.8 and an impressive Altman Z-Score of 3.87, indicating solid financial stability.
Leerink Partners notes that Pediatrix is benefiting from favorable IDR (dispute resolution) awards and could potentially repurchase significant stock this year, with a cash balance that might reach 25% of its market cap by year-end.
The firm considers the company’s guidance conservative and points to positive earnings skew and favorable mix driving upside. Valuation stands at approximately 7x EBITDA for next year.
Leerink Partners’ new price target of $17 represents 7.3x their 2026 EBITDA forecast, in line with Pediatrix’s three-year average of 7.1x, though the firm expresses some caution regarding subsidies and sustainability of current trends.
In other recent news, Pediatrix Medical Group reported strong earnings 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, representing a 26.19% surprise. Revenue also exceeded projections, coming in at $468.84 million compared to the anticipated $464.37 million. Additionally, Pediatrix Medical Group announced a $250 million share repurchase program, approved by its Board of Directors, which will be implemented over a three-year period.
Analyst firms have also been adjusting their price targets for the company. UBS raised its price target to $16.50 from $16.00, maintaining a Neutral rating, following the company’s second-quarter outperformance. Meanwhile, Jefferies lowered its price target to $19.00 from $21.00, despite Pediatrix’s strong quarterly results and an increase in its fiscal year 2025 EBITDA guidance by $20 million at the midpoint. These developments reflect the ongoing adjustments and evaluations by analysts in response to the company’s recent performance and strategic initiatives.
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