A.J. Rice, an analyst from UBS, has initiated a new Buy rating on Addus Homecare (ADUS).
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A.J. Rice has given his Buy rating due to a combination of factors including the anticipated growth in demand for Addus Homecare’s services, driven by an aging population and a shift towards more cost-effective care settings. The company’s current valuation is seen as attractive, trading at a discount compared to its historical average, which presents a buying opportunity for investors. Rice anticipates that Addus will achieve consistent top-line growth of at least 10% annually, supported by both organic growth and strategic acquisitions.
Despite concerns about potential Medicaid cuts, Rice believes that Addus will not be significantly impacted due to the nature of the proposed legislative changes. The company’s focus on serving the elderly and vulnerable populations is expected to shield it from major reimbursement rate reductions. The price target of $145 is based on a valuation multiple that aligns with industry peers, reflecting confidence in the company’s growth trajectory and earnings potential.
According to TipRanks, Rice is a 5-star analyst with an average return of 8.1% and a 60.68% success rate. Rice covers the Healthcare sector, focusing on stocks such as Elevance Health, The Ensign Group, and UnitedHealth.
In another report released on August 21, RBC Capital also reiterated a Buy rating on the stock with a $134.00 price target.