Acadia slips after BofA downgrades on Medicaid SDP headwind risk

Acadia Healthcare

10/09/2025 14:02

** Acadia Healthcare ACHC.O fell as much as 1.8% to $22.87 premarket after BofA Global Research downgraded the behavioral healthcare services provider to “neutral” from “buy” and cut its price target to $25 from $27.

** Brokerage says Medicaid state-directed payment (SDP) cuts will pose bigger headwinds than previously expected for ACHC

** BofA estimates the cuts will be a 1.5% headwind to core earnings in 2028, potentially widening to 9% by 2035—a larger impact than for hospital operators HCA HCA.N, Tenet THC.N, Universal Health UHS.N and Ardent Health ARDT.N

** SDP also likely to constrain Acadia's capacity to price services at high-single digit levels, BofA says

** Co's same-store volumes slowed to low single digits, citing disruptions at a handful of locations due to legal issues and slower inpatient admissions - BofA

** Up to last close, stock had fallen 41% YTD vs. benchmark S&P 500's .SPX 10.7% gain

 (Reporting by Johann M Cherian in Bengaluru)

 ((johann.mcherian@thomsonreuters.com;))