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On Tuesday, Raymond (NSE:RYMD) James reaffirmed their positive stance on Well Health Technologies Corp. (WELL:CN) (OTC: WLYYF), maintaining an Outperform rating and a price target of Cdn$11.00. The confirmation comes after Well Health announced a delay in its annual financial filings due to an investigation into the billing practices of its subsidiary, Circle Medical (TASE:BLWV), by the U.S. Attorney's Office (USAO).
The delay is intended to provide Well Health's auditors with sufficient time to assess the subsidiary's business and prepare for any potential financial impacts. Following the announcement, Well Health's market capitalization diminished by approximately $280 million. The majority of this decline occurred on the first trading day after the news was released. However, the subsequent global market volatility has made it difficult to isolate the full effect of the announcement on Well Health's stock performance.
The analysts at Raymond James have updated their financial estimates for Well Health to include the recent acquisition of Rev and have also factored in a conservative C$10 million settlement regarding the USAO inquiry. Despite the current situation, the firm stands by its Outperform rating and the set price target, indicating confidence in the company's long-term prospects.
The investigation into Circle Medical's billing practices by the USAO has undoubtedly introduced an element of uncertainty for Well Health. Nonetheless, Raymond James has chosen to focus on the overall health of the company and its recent business developments, which they believe will sustain the company's growth trajectory. The firm's maintained rating and price target suggest they see the recent drop in market cap as a momentary setback rather than a long-term detriment to Well Health's value.
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