Option Care Health (OPCH) PT Lowered to $32 at Citizens
Citizens analyst Constantine Davides lowered the price target on Option Care Health (NASDAQ: OPCH) to $32.00 (from $38.00) while maintaining a Market Outperform rating.
The analyst commented, "Our target goes from $38 (14x our prior 2026 EBITDA estimate) to $32 (12x our revised 2026 EBITDA estimate). Net/net, a lot of moving pieces but we ultimately believe OPCH's current challenges remain confined to a particular therapeutic category, which was a sizable franchise that historically contributed to OPCH profitability in a disproportionate manner prior to the introduction of a multitude of biosimilars. As such, an erosion of category economics -- further complicated by several other factors (IRA, Medicare Advantage and formulary / benefit design changes) - has conspired to disrupt patient CID census in Q1. With no other therapy nearly as meaningful to OPCH on a go-forward basis, and with industry transactions still being executed at more than 2x OPCH's valuation (now 8x 2026 EBITDA), we characterize today's selloff (roughly 30% at the time of this note) as extreme relative to our ~2% haircut to 2026E EBITDA. Given these factors, we maintain our Market Outperform rating."