Truist raises Huron Consulting price target to $180, maintains Buy

On Tuesday, Truist Securities updated their outlook on Huron Consulting Group (NASDAQ:HURN), with analyst Tobey Sommer increasing the price target to $180 from the previous $165, while reiterating a Buy rating on the company’s stock. The positive outlook aligns with the company’s strong market performance, as revealed by InvestingPro data showing an impressive 50.94% return over the past year and a recent 18.42% surge in the past week. The adjustment comes amid expectations for accelerated growth in Huron’s core markets, which include Healthcare (HC) and Higher Education, due to anticipated changes in federal spending.

Sommer’s analysis suggests that Huron could benefit from a potential increase in large-scale enterprise projects at academic medical centers. This is in response to a proposed 15% cap on overhead charges for National Institutes of Health (NIH) grants, which could drive universities to undertake more extensive projects. Additionally, the analyst foresees a rise in demand for Huron’s performance improvement services at hospitals, spurred by expected federal healthcare spending cuts through 2027. With a "GREAT" Financial Health Score from InvestingPro and steady revenue growth of 9.11%, the company appears well-positioned to capitalize on these opportunities.

In light of these factors, Truist Securities has also revised its adjusted earnings per share (EPS) estimate for Huron upward to $8.28 for the year 2026, a slight increase from the former estimate of $8.03. This revision reflects the firm’s confidence in Huron’s potential to capitalize on the evolving market conditions within the healthcare and higher education sectors.

The updated price target and EPS estimate are based on Truist’s analysis of Huron’s market position and the anticipated impact of federal spending changes on the company’s sales. Huron Consulting Group specializes in providing consulting services to a wide range of industries, with a significant focus on healthcare and higher education, which together account for a majority of the company’s total sales.

Investors and market watchers will be paying close attention to Huron’s performance in the coming years, particularly in light of the federal policy changes that could influence the company’s growth trajectory and financial outcomes. According to InvestingPro, which offers 13 additional valuable insights about HURN and comprehensive analysis through its Pro Research Report, the stock is currently trading near its Fair Value, with strong analyst consensus and a moderate P/E ratio of 22.79.

In other recent news, Huron Consulting Group reported strong fourth-quarter 2024 financial results, significantly surpassing analyst expectations. The company achieved an earnings per share (EPS) of $1.90, exceeding the projected $1.52, and reported a revenue of $399.31 million, which was above the anticipated $379.99 million. For the full year 2024, Huron saw a 9.1% increase in revenues to $1.49 billion, with net income rising by 86.7% to $116.6 million. Looking ahead to 2025, Huron’s guidance forecasts an EPS range of $6.80-$7.60 and revenue projections between $1.58 billion and $1.66 billion, aligning with consensus estimates.

Analysts have responded positively to these results, with both Benchmark and Truist Securities raising Huron’s price target to $165 while maintaining a Buy rating. Benchmark’s analysis cited Huron’s potential in the healthcare sector, driven by possible changes in clinical reimbursement models. Truist Securities noted that recent regulatory changes are expected to boost demand for Huron’s services, particularly in healthcare and education, with the company’s valuation remaining attractive.

Additionally, Huron’s adjusted EBITDA margin saw an increase, with a projected expansion of 70 to 120 basis points for 2025. The company also reported a substantial increase in free cash flow, allowing it to pay down debt, repurchase shares, and invest in strategic acquisitions. Huron will host an Investor Day on March 25, 2025, to provide further updates on its strategy and financial goals.

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