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On Thursday, BTIG updated its outlook on Astrana Health, Inc (NASDAQ: ASTH), raising the price target from $60.00 to $70.00 while maintaining a Buy rating on the stock. The firm's analysis indicates that Astrana, along with peers Evolent Health (NYSE:EVH) and Accolade, contributes to improvements in cost, quality, and patient satisfaction within the healthcare sector.
Despite concerns over Humana's (NYSE:HUM) stock due to Stars ratings, BTIG anticipates no effect on the contracted rates that Evolent Health will receive from Humana. The firm highlighted a study showing Evolent Health's ability to significantly reduce costs and hospital readmissions for its most engaged members. It is suggested that Humana may consider expanding its collaboration with Evolent Health to additional regions as a result of the Stars ratings news.
Additionally, BTIG noted Accolade's success in managing medical costs, with one of its largest clients seeing approximately a 2% medical trend over four years. The firm also praised Astrana Health's performance in 2021, where its ACO managed to deliver costs roughly 13% lower than the benchmark.
The firm's stance reflects a positive view on the role of health technology and value-based care in enhancing healthcare outcomes. According to BTIG, the goal of these services is to simultaneously raise the quality of care and reduce healthcare expenses.
In other recent news, Astrana Health has been the focus of analyst attention, with Baird raising the stock price target to $67 and maintaining an Outperform rating. The firm believes Astrana Health is undervalued and anticipates substantial growth, estimating a 24% increase in Revenue and a 21% rise in adjusted EBITDA over a three-year compounded annual growth rate.
Additionally, Astrana Health has announced plans to acquire Collaborative Health Systems (CHS), a subsidiary of Centene (NYSE:CNC) Corporation, expected to be completed by the end of the year.
The acquisition is set to enhance Astrana's care delivery capabilities and extend its reach in key markets. In another development, Astrana initiated the process for the resale of Earn-Out Shares linked to its acquisition of Asian American Medical Group (AAMG), allowing former AAMG stockholders to potentially sell shares upon meeting specified performance targets.
Financial firms Truist Securities and Stifel have recently upgraded their outlooks for Astrana. Truist Securities shifted Astrana Health's stock rating from Hold to Buy and raised the price target to $50.00, while Stifel raised its price target for Astrana Health to $48, maintaining a Buy rating. Both firms recognize Astrana Health's strong performance and potential for growth in the value-based care industry.
InvestingPro Insights
Astrana Health's recent performance aligns with BTIG's positive outlook. According to InvestingPro data, the company has shown strong financial growth with a 39.65% increase in quarterly revenue as of Q2 2024. This robust growth supports BTIG's decision to raise the price target and maintain a Buy rating.
InvestingPro Tips highlight that Astrana Health is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.92. This suggests the stock may be undervalued considering its growth prospects, which is consistent with BTIG's bullish stance.
The company's strong market performance is evident from its 90.24% price return over the past year and its current trading near the 52-week high. These metrics reinforce BTIG's positive view on Astrana Health's role in improving healthcare outcomes and cost efficiency.
For investors seeking more comprehensive analysis, InvestingPro offers 14 additional tips for Astrana Health, providing deeper insights into the company's financial health and market position.
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