Barclays initiates Astrana Health, noting risks on pending acquisition

Astrana Health

02/04/2025 16:01

** Brokerage Barclays initiates healthcare service provider Astrana Health's ASTH.O coverage with rating "equal-weight"

** Brokerage sets PT at $36, representing 20.6% upside to the stock's last close

** Brokerage says the pending deal to acquire Prospect Health is the largest in the company's history, and the near-term execution risks are real given the scale, complexity and associated debt burden

** "This creates an overhang that tempers our excitement for improving industry dynamics and leaves us on the sidelines for now" - Barclays

 ** ASTH said in November it entered into a definitive agreement to acquire clinical care provider Prospect Health for $745 million

** Barclays says ASTH is well-positioned to capture improving Medicare Advantage rates, which could potentially reduce costs

** Ten of 12 brokerages rate the stock "buy" or higher, 2 "hold"; their median PT is $50.45, according to data compiled by LSEG

** Stock has fallen 6.1% YTD

(Reporting by Siddhi Mahatole)

((siddhi.mahatole@thomsonreuters.com))