Acadia Healthcare price target lowered to $65 from $70 at KeyBanc

KeyBanc lowered the firm’s price target on Acadia Healthcare (ACHC) to $65 from $70 and keeps an Overweight rating on the shares. The firm says Q4 results and 2025 guidance were disappointing, but shouldn’t be thesis altering. In its view, Friday’s 25% stock decline reflects frustrations with incremental headwinds that weren’t shared in January, when Acadia indicated volumes had stabilized; and concerns about potential risk to Medicaid provider taxes. KeyBanc’s bridge suggests Acadia’s core EBITDA growth is implied in the 0%-5% range for 2025 after various puts and takes, which seems appropriately conservative to the firm. Additionally, operational improvements at a handful of underperforming facilities and Tennessee DPP could drive upside.