Leerink Partners analyst Whit Mayo has maintained their neutral stance on AGL stock, giving a Hold rating yesterday.
Whit Mayo has given his Hold rating due to a combination of factors that suggest uncertainty and challenges in forecasting Agilon Health’s future performance. The company’s recent quarterly results were weaker than expected, with adjusted EBITDA missing consensus estimates. This underperformance is attributed to ongoing elevated cost trends, particularly in Part D drug costs and supplemental benefits, which the company is attempting to mitigate by reducing risk exposure and enhancing data analytics capabilities.
Despite efforts to address these issues, Mayo expresses low confidence in Agilon Health’s 2025 targets. The guidance indicates a modest revenue decline due to membership reductions from partnership exits, although some growth is anticipated in new and existing markets. Additionally, while improved payer contracts and bids may help offset some financial impacts, the persistent elevated utilization levels and lack of visibility into cost trends make it challenging to accurately forecast the company’s financial trajectory. Consequently, Mayo maintains a cautious stance with a Hold rating, reflecting the difficulties in valuing an unprofitable business amid these uncertainties.
In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $2.00 price target.
AGL’s price has also changed moderately for the past six months – from $4.380 to $3.360, which is a -23.29% drop .