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Investing.com - UBS lowered its price target on Acadia Healthcare (NASDAQ:ACHC) to $31.00 from $45.00 on Thursday, while maintaining a Buy rating on the behavioral healthcare provider’s stock. The company’s shares, currently trading at $18.27, sit near their 52-week low of $17.12, having declined over 74% in the past year.
The price target reduction reflects UBS’s decreased 2025 adjusted EBITDA estimate to $687 million, down from its previous estimate of $705 million, citing additional deterioration in the operating environment. According to InvestingPro data, the company’s current EV/EBITDA multiple stands at 6.31x, while five analysts have recently revised their earnings estimates downward.
UBS also cut its 2026 adjusted EBITDA estimate to $716 million from $768 million, representing an 8% growth rate applied to its normalized 2025 estimate after accounting for approximately $29 million in out-of-period supplemental payments.
The new price target is based on a roughly 7.0x EV/EBITDA multiple applied to UBS’s 2026 adjusted EBITDA estimate, down from the previously used 8.5x multiple.
UBS noted that while Acadia Healthcare has traded at an average multiple of 10x over the past five years, a lower multiple is warranted given the company’s "continued challenged position," with shares currently trading at approximately 5.5x UBS’s 2026 adjusted EBITDA estimate.
In other recent news, Acadia Healthcare reported its second-quarter earnings for 2025, exceeding analyst expectations with an earnings per share (EPS) of $0.83, compared to the projected $0.70. This marks an 18.57% positive earnings surprise. Despite this, Guggenheim lowered its price target for Acadia Healthcare to $29.00 from $36.00, maintaining a Buy rating. The adjustment is attributed to concerns over weak Medicaid volume growth, which has impacted Acadia’s EBITDA performance. Guggenheim anticipates this trend will continue, potentially causing a $30 million, or 4%, reduction in yearly earnings through the second half of 2025. These developments highlight ongoing challenges for Acadia Healthcare amidst external pressures.
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