Yi Chen, an analyst from H.C. Wainwright, reiterated the Buy rating on Opko Health (OPK – Research Report). The associated price target remains the same with $3.00.
Yi Chen has given his Buy rating due to a combination of factors surrounding Opko Health’s strategic moves and financial outlook. The recent agreement for Labcorp to acquire certain oncology testing services from BioReference, a subsidiary of Opko Health, is a significant development. This transaction, valued at up to $225 million, is expected to streamline BioReference’s operations and potentially accelerate its path towards profitability. The proceeds from this deal may also be used to reduce Opko’s outstanding debt, which could strengthen its financial position.
Furthermore, the valuation analysis supports the Buy rating, with a 12-month price target based on a comparative universe analysis of diagnostics companies. This analysis uses projected sales per share and an EV/Revenue multiple to arrive at a price objective of approximately $3. However, the rating also considers risks such as lower-than-expected growth in diagnostics services and potential regulatory challenges. Despite these risks, the strategic divestitures and financial projections present a favorable outlook for Opko Health, justifying the Buy recommendation.
In another report released today, Barrington also maintained a Buy rating on the stock with a $2.25 price target.