Agiliti Inc shares climbed 15% to close at $7.83 on Tuesday after UBS analysts upgraded the healthcare services provider’s stock to ‘Buy’ from ‘Neutral’ ahead of what they believe are cost improvement upside, execution of a turnaround plan, and a solution for a challenged customer base.
In an update to clients, though, the analysts reduced their price target on the stock from $16 per share to $10, noting the company’s hospital customers remain challenged with HCA Healthcare Inc recently outlining plans to downsize inventory by 25% over the next 24 months.
"We highlight a compelling 3.9:1 risk/reward skew and anticipate this call working as Agiliti demonstrates evidence that the turnaround is underway," the analysts wrote.
Analysts at UBS foresee improving optics as costs dissipate in 2024 and model EBITDA outpacing revenue growth in 2025 as Agiliti reverses margin pressure from big implementations and operating expenditure initiatives bear fruit.
Shares of Agiliti have fallen 56% year to date.
Contact Sean at sean@proactiveinvestors.com