Alignment Healthcare jumps as BofA upgrades to 'buy', raises PT

Alignment Healthcare

30/05/2024 15:57

** Shares of health insurer Alignment Healthcare  ALHC.O 
rise as much as 15% to an over four-month high of $8.03 
    ** Brokerage BofA Global Research upgrades ALHC to "buy"
from "neutral" and raises its PT to a street-high of $11 from
$7.75
    ** BofA says co signaling a pivot to focusing on margin over
growth for the first time since IPO, adding profitability could
come as soon as 2025
    ** "ALHC is in a unique position where the bulk of its
competitors are facing sizable multi-year headwinds, giving ALHC
cover to cut benefits and improve profitability without losing
share" - brokerage
    ** "Roughly 25% of competing insurer enrollment in ALHC's
counties are in plans which are slated to drop below 4 stars in
2025, which carries a very significant (5-10%) revenue headwind,
and could take years to recover from" - BofA
    ** Star ratings given by the U.S. government to insurance
plans for a year determine the bonus payments paid the following
year
    ** YTD, stock down 9.4%

 (Reporting by Puyaan Singh)
 ((Puyaan.Singh@thomsonreuters.com;))