Analyst Allen Lutz of Bank of America Securities reiterated a Buy rating on Healthequity (HQY – Research Report), retaining the price target of $125.00.
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Allen Lutz has given his Buy rating due to a combination of factors including the recent rally in Healthequity’s stock, driven by potential legislative changes and improved clarity on fraud costs. Although the exclusion of Health Savings Account (HSA) provisions from the Senate’s version of the Reconciliation Bill presents a setback, there remains a possibility for these provisions to be reintroduced during House and Senate negotiations. Despite the current legislative hurdles, Lutz sees long-term opportunities for HSA market expansion, particularly by 2026.
Furthermore, the House version of the bill, which had previously passed, suggested a significant increase in market assets under management (AUM) by 3-10% over the next five years. This expansion could potentially add around $22 billion to the market AUM by 2030, with Healthequity well-positioned to capitalize on approximately $20 billion of this growth. Lutz’s analysis, based on estimates from the Joint Committee on Taxation and the Congressional Budget Office, underscores the potential benefits for Healthequity should these provisions be included in the final legislative package.
In another report released on June 12, Jefferies also maintained a Buy rating on the stock with a $130.00 price target.
Based on the recent corporate insider activity of 67 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of HQY in relation to earlier this year.