HealthEquity price target raised to $100 from $92 at RBC Capital

RBC Capital raised the firm’s price target on HealthEquity to $100 from $92 and keeps an Outperform rating on the shares. The firm is elevating the stock to “one of its highest conviction ideas” after digging into its three key earnings drivers – the HSA account growth, the custodial cash/yields, and the service costs-the combination that should drive a 25% EPS CAGR through FY27, the analyst tells investors in a research note. Despite re-accelerating fundamentals, HealthEquity’s valuation has steadily compressed of late, primarily on concerns around its exposure/sensitivity to interest rates and the forthcoming Fed cutting cycle, the firm added.