UBS maintains buy rating for Surgery Partners stock amid AMSURG sale

On Tuesday, UBS analysts reiterated their Buy rating for Surgery Partners stock (NASDAQ:SGRY), maintaining a price target of $34.00. The stock currently trades at $23.37, with analyst targets ranging from $24 to $36. According to InvestingPro, the company maintains a "GOOD" overall Financial Health score. The reaffirmation comes amid discussions regarding the potential sale of AMSURG, a major national surgery center chain.

The UBS analysts highlighted that AMSURG and Surgery Partners are the two major national surgery center chains not owned by a health system or insurer. The potential sale of AMSURG could influence the valuation of Surgery Partners, which currently has a market capitalization of $2.97 billion and has shown strong revenue growth of 13.54% over the last twelve months.

In January, Bain Capital offered to acquire all outstanding shares of Surgery Partners common stock for $25.75. This offer translates to an approximate 10.5x enterprise value to EBITDA multiple based on UBS’s 2026 EBITDA estimates, or around 12x based on their 2025 estimates. Currently, the company trades at an EV/EBITDA multiple of 13.13x. InvestingPro subscribers can access additional valuation metrics and 6 more exclusive ProTips about SGRY’s outlook.

The valuation differences between AMSURG’s sale price and Bain’s offer for Surgery Partners are attributed to differing calculation methods. AMSURG’s valuation is based on trailing EBITDA, while Surgery Partners’ valuation is based on forward EBITDA estimates.

UBS analysts noted that the lack of clarity on AMSURG’s specific EBITDA also contributes to the valuation gap between the two companies.

In other recent news, Surgery Partners reported its first-quarter 2025 earnings, revealing a mixed performance with net revenue of $776 million, which was slightly below the expected $778.04 million. Earnings per share (EPS) came in at $0.04, missing the forecasted $0.08. Despite this, the company experienced an 8% year-over-year increase in net revenue, supported by a rise in surgical cases, particularly in orthopedics. Analysts from Benchmark maintained a Buy rating with a $35 price target, reflecting confidence in Surgery Partners’ operational strategy and financial health. Meanwhile, Leerink Partners adjusted its price target to $34 from $36 while keeping an Outperform rating, citing robust patient volumes and effective cost management. KeyBanc Capital Markets maintained a Sector Weight rating, noting that Surgery Partners’ first-quarter performance met expectations with modest EBITDA outperformance. Additionally, Cantor Fitzgerald reaffirmed an Overweight rating, highlighting the company’s stable trends and potential deal announcements. Surgery Partners continues to attract attention with Bain Capital’s nonbinding acquisition proposal, indicating potential strategic developments in the near future.

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