Acadia Healthcare price target lowered to $37 from $48 at Mizuho

Mizuho analyst Ann Hynes lowered the firm’s price target on Acadia Healthcare (ACHC) to $37 from $48 and keeps a Neutral rating on the shares. The company updated its long-term outlook, targeting average annual revenue growth of 7%-9%, and average adjusted EBITDA annual growth of 8%-10%, which is 200 basis point reduction in the revenue growth target and a 300 point reduction in the adjusted EBITDA growth target, the analyst tells investors in a research note. Mizuho does not believe Acadia can trade at its previous multiple until the company generates positive free cash flow. However, it views the reduction in the long-term guidance as positive given the prior outlook was predicated on “aggressive growth plans.” The new outlook removes a risk going forward, the firm contends.