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Investing.com - Jefferies has lowered its price target on Oscar Health Inc (NYSE:OSCR) to $8.00 from $9.00 while maintaining an Underperform rating on the stock. The healthcare company, currently trading at $14.70 with a market capitalization of $3.74 billion, shows strong revenue growth of 54% in the last twelve months according to InvestingPro data.
The price target reduction follows Oscar Health’s $500 million EBIT (earnings before interest and taxes) cut, which Jefferies noted was accompanied by an 8% increase in the company’s stock price.
Jefferies indicated that Oscar Health raised its 2025 MLR (medical loss ratio) by 530 basis points, which the firm characterized as "less bad" than the mid-to-high single-digit percentage increases reported by competitors Centene (NYSE:CNC) and Elevance Health.
The research firm expressed skepticism about Oscar Health’s guidance, describing it as "very aggressive" and predicting another 200+ basis point cut to MLR/margin that would bring Oscar’s pressure in line with industry peers.
Jefferies revised its profit estimates for Oscar Health, projecting EBIT of ($156 million) for 2025 and ($89 million) for 2026.
In other recent news, Oscar Health has raised its full-year revenue forecast to between $12 billion and $12.2 billion, surpassing the average analyst estimate of $11.32 billion. Despite this positive revenue outlook, Piper Sandler downgraded Oscar Health from Overweight to Neutral, reducing its price target from $18.00 to $14.00 due to concerns in the ACA market. Similarly, Jefferies lowered its price target for Oscar Health to $9.00 from $12.00, maintaining an Underperform rating because of potential risk adjustment accruals. Barclays (LON:BARC) initiated coverage on Oscar Health with an Underweight rating and a $17.00 price target, highlighting policy risks. The company recently cut its 2025 guidance, attributing the decision to higher acuity in the ACA Marketplace. These developments come after Oscar Health’s investor day, where it outlined a strategy to achieve over $2.25 earnings per share by 2027, focusing on margin expansion and expense reductions. Piper Sandler maintained its Neutral rating and $14.00 price target after the company’s pre-announcement of second-quarter 2025 results.
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