Morningstar, Jefferies flag headwinds on Australia's Regis after govt funding shortfall

Regis Healthcare

22/09/2025 21:07

** Morningstar, Jefferies flag headwinds after Regis Healthcare REG.AX on Monday said govt's 4.7% base price increase for aged care classification falls short of expectations and projected FY26 underlying EBITDA that was just up 3%-7% from FY25

** Morningstar cut its fair value on the aged care operator by 6% to A$7.40/shr,  due to lower funding partially offset by accommodation deposits

** However, investment research firm says shares trade at modest 8% discount to Morningstar's valuation, with the market likely too "pessimistic"

** Jefferies cut PT to A$8.40 from A$9.90 while retaining a "buy" rating, and says govt funding changes prompted REG to guide FY26 EBITDA below expectations

** Brokerage expects regulatory reform within medium term to boost revenue generation as govt initiatives aim to ensure sustainable residential aged-care sector viability

** YTD, stock up 13.3% as of last close

(Reporting by Kumar Tanishk in Bengaluru)

((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk http://www.x.com/thatstanishk))