Healthequity, the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Allen Lutz from Bank of America Securities maintained a Buy rating on the stock and has a $125.00 price target.
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Allen Lutz has given his Buy rating due to a combination of factors related to the potential market expansion for Healthequity. Despite the low likelihood of ACA subsidies shifting to Health Savings Accounts (HSAs) for Bronze plans, the potential revenue opportunity remains significant. If such a shift were to occur, it could expand the market by approximately 19%, representing over $600 million in revenue for HSA vendors. For Healthequity, capturing a 10% market share could lead to a 6% to 8% increase in EBITDA and EPS estimates by fiscal year 2027.
Furthermore, each Bronze plan linked HSA account could generate around $87 annually through various revenue streams, including custodial, interchange, and service fees. This opportunity hinges on Healthequity’s ability to establish strong relationships with health plans offering Bronze coverage. The current market conditions and the company’s strategic positioning support the Buy rating, with a price objective set at $125.00 USD, reflecting confidence in the company’s growth potential.
Lutz covers the Healthcare sector, focusing on stocks such as Hims & Hers Health, GoodRx Holdings, and Henry Schein. According to TipRanks, Lutz has an average return of 12.9% and a 67.08% success rate on recommended stocks.