UBS reiterates Buy rating on Option Care Health stock with $40 target

Investing.com - UBS maintained its Buy rating and $40.00 price target on Option Care Health (NASDAQ:OPCH) on Monday. The stock currently trades at $29.57, suggesting a potential 35% upside to UBS’s target. According to InvestingPro data, Option Care Health appears undervalued based on its Fair Value assessment.

The firm noted that Option Care Health still believes its long-term growth algorithm remains intact, although it likely won’t be achieved in 2026. This growth model typically calls for high-single-digit top-line growth, low-double-digit EBITDA growth, and slightly higher EPS growth. The company has demonstrated strong performance with revenue of $5.53 billion and impressive 15.79% revenue growth over the last twelve months.

Looking ahead to 2026, UBS indicated the company expects to face headwinds related to STELARA but still anticipates growth in revenues, EBITDA, and EPS next year.

The company is currently progressing through its budgeting process while simultaneously negotiating STELARA contracts with Janssen and other biosimilar manufacturers, making it difficult to fully assess the ultimate impact expected from STELARA in 2026.

UBS expects Option Care Health to provide its initial 2026 outlook, including anticipated impacts from STELARA, in January, following a similar timeline to last year’s guidance release.

In other recent news, Option Care Health reported its third-quarter earnings for 2025, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $0.45, surpassing the forecast of $0.43. Additionally, Option Care Health reported revenues of $1.44 billion, which was higher than the anticipated $1.41 billion. Truist Securities reiterated its Buy rating on Option Care Health, maintaining a price target of $40.00, citing strong demand and favorable market positioning. Meanwhile, Citizens adjusted its price target for the company from $38.00 to $36.00 due to valuation concerns, although it kept a Market Outperform rating. Citizens also highlighted the company’s robust cash flow, projecting operating cash flow of at least $320 million by 2025. The firm also expects free cash flow generation of $286 million in the same year. These developments reflect the company’s ongoing financial performance and analysts’ varying perspectives on its valuation.

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