BofA Securities Downgrades Oscar Health Inc (OSCR) to Neutral

BofA Securities analyst Adam Ron downgraded Oscar Health Inc (NYSE: OSCR) from Buy to Neutral with a price target of $21.00 (from $25.00).

The analyst comments "We are downgrading OSCR from Buy to Neutral as we believe our new valuation of ~$21 (was $25) appropriately reflects the expected margin trajectory. Additionally, as we get closer to the election, we believe that the uncertain status of the exchange subsidies (which were passed under Biden and are set to expire January 1, 2026 under current law) will weigh on the stock, making it difficult to argue for multiple expansion. Our valuation assumes a 50% probability that they expire, meaning that if they do go away, the stock could be down (we see 60% EPS delta under the two scenarios). Given OSCR’s outperformance over the past year (up almost 200%), and the binary nature of the fate of the subsidies, we see a much more balanced risk reward today, leading us to downgrade to Neutral. We now see more upside in Alignment (ALHC, $6.98, C-1-9, which we are upgrading to Buy today) which is just beginning its path to inflecting to profitability, has a more dislocated valuation, and has less binary regulatory exposure."

For an analyst ratings summary and ratings history on Oscar Health Inc click here. For more ratings news on Oscar Health Inc click here.

Shares of Oscar Health Inc closed at $20.18 yesterday.

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