Medifast (MED) Could be a Take-Over Target, Says Analyst at DA Davidson

Medifast (NYSE: MED) could be a takeover target, according to DA Davidson analyst Linda Bolton Weiser. She reiterated a Buy rating and $250 on the stock.

"We are reiterating our BUY in light of a September 12th 8-K. Our $250 PT is based on 28x 2020E EPS of $8.63 plus $8/share of cash. The 8-K disclosed changes to the severance plan for the CEO and other executives, designed to retain them even with a potential change of control (CoC). We think this signals the board believes MED could be approached by a potential acquirer," Weiser stated.

"The severance payment amounts were increased vs. the previous plan - for CEO Dan Chard, from 1x salary and bonus if terminated within six months of CoC, to 2.5x during the two years following CoC. Nick Johnson, President of OPTAVIA USA, was included in the plan this time," added the analyst.

For an analyst ratings summary and ratings history on Medifast click here. For more ratings news on Medifast click here.

Shares of Medifast closed at $105.02 yesterday.

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