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Investing.com - BofA Securities raised its price target on Premier, Inc. (NASDAQ:PINC) to $21.00 from $19.00 while maintaining an Underperform rating on the healthcare solutions provider. According to InvestingPro data, the stock is currently trading near its 52-week high, with a notable 33% gain over the past six months, though analysis suggests the stock may be approaching overbought territory.
The firm cited Premier’s ability to offset net administrative fee pressure by capitalizing on demand for advisory services, which are expected to grow 25% in fiscal year 2026. This demand stems from regulatory and legislative pressures facing health systems. InvestingPro analysis shows the company maintains strong profitability with a 63% gross margin and operates with a moderate debt level, suggesting financial flexibility to pursue growth opportunities.
BofA Securities noted that while Premier’s Performance Services segment should see mid-term revenue growth, net administrative fee pressure will remain a headwind even with slight increases in gross administrative fee growth through FY26 as the company finalizes the last of its 2020 member group contracts. Five analysts have recently revised their earnings estimates downward, with InvestingPro data indicating an expected sales decline in the current fiscal year.
Following these renewals, the firm expects 20-25% of Premier’s contract book will be up for renewal each year, with potential for net administrative fee growth if market rates stabilize. However, recent channel checks indicate continued upward pressure on shareback rates, limiting intermediate-term visibility.
The price target adjustment to $21 is based on the same approximately 8x calendar year 2025 EV/EBITDA multiple used in the previous valuation.
In other recent news, Premier Inc . announced its fiscal fourth-quarter results, showcasing strong earnings and revenue that exceeded analyst expectations. The company reported earnings per share of $0.46, significantly above the forecasted $0.34. Revenue for the quarter reached $262.86 million, surpassing the consensus estimate of $247.13 million. Although this revenue figure marked a 12% decrease compared to the same period last year, it represented a 1% sequential increase from the third quarter. Premier also provided a solid outlook for fiscal 2026, contributing to investor interest. Despite the strong financial performance, some investor caution was noted regarding future guidance and market conditions. Analyst firms have not reported any recent upgrades or downgrades for Premier. These developments highlight the company’s current financial health and market position.
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