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Investing.com - BofA Securities resumed coverage of Surgery Partners (NASDAQ:SGRY) with a Buy rating and a price target of $28.00 on Monday. According to InvestingPro data, this target aligns with the broader analyst consensus, as the stock currently has a "Strong Buy" rating with targets ranging from $24 to $36.
The research firm had previously suspended its rating on the ambulatory surgery center operator, but resumed coverage following Surgery Partners’ rejection of a buyout offer from Bain Capital on June 17, 2025. The company, which has demonstrated strong revenue growth of ~14% over the last twelve months and maintains a "GOOD" Financial Health score, currently trades at an EV/EBITDA multiple of 12.7x.
BofA Securities cited strong tailwinds for Ambulatory Surgery Centers (ASCs) while noting the stock is trading at a depressed multiple of 10x 2026 estimated EBITDA less non-controlling interest (NCI), below its historical average of 14x and below the 14x multiple on the recent AmSurg platform deal.
The firm believes the market is incorrectly penalizing Surgery Partners for its joint-venture structures by miscalculating valuation metrics related to non-controlling interest.
The $28 price target is based on 11.6x 2026 estimated EBITDA-NCI, which BofA notes is toward the lower end of the historical range due to cash flow pressure from high interest rates, but still at a premium to hospital stocks as ASCs are less exposed to potential policy changes beyond 2026.
In other recent news, Surgery Partners has been in the spotlight following several key developments. The company announced that it has ended acquisition talks with Bain Capital, concluding that its prospects as an independent publicly traded company exceed the value of Bain’s proposal. This decision was made after a thorough evaluation by a Special Committee of independent directors, who worked with financial and legal advisors. Additionally, UBS reiterated its Buy rating on Surgery Partners, maintaining a $34.00 price target, following the rejection of Bain Capital’s acquisition offer. The board’s decision was based on the belief that Bain’s offer undervalued the company’s earnings potential.
Meanwhile, the Centers for Medicare & Medicaid Services (CMS) proposed favorable rule changes for Ambulatory Surgical Centers, which include a 2.4% rate update for 2026. This proposal led Benchmark to reiterate its Buy rating and a $35.00 price target for Surgery Partners. Cantor Fitzgerald also maintained its Overweight rating with a $36.00 price target, expressing confidence in the company’s alignment with outpatient volume and pricing expectations. These developments highlight the ongoing interest and evaluations from various analyst firms regarding Surgery Partners’ market position and future prospects.
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