Bank of America Securities analyst Adam Ron reiterated a Sell rating on Agilon Health (AGL – Research Report) yesterday and set a price target of $2.40.
Adam Ron has given his Sell rating due to a combination of factors impacting Agilon Health’s financial outlook. The company experienced a slight miss in the quarter, with the Medical Loss Ratio (MLR) falling short of expectations due to higher-than-anticipated Part D drug costs and an MSSP true-up. These issues are linked to contracts that Agilon plans to exit by 2025, but they still contribute to a lack of visibility and confidence in the company’s near-term performance.
Additionally, while Agilon’s 2025 guidance aligns with previous comments, the ongoing elevated cost trends and anticipated decline in Medicare Advantage enrollment pose risks to revenue. The company is also dealing with cost pressures from the Inflation Reduction Act and higher star cut points. Although Agilon is focusing on strategies to reach cash flow breakeven by 2027, such as slowing growth to prioritize profitability and repricing contracts, these efforts are not expected to yield immediate improvements. Consequently, Adam Ron maintains a cautious outlook, reiterating the Underperform rating.
In another report released yesterday, Barclays also maintained a Sell rating on the stock with a $2.00 price target.
Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of AGL in relation to earlier this year.