Option Care Health: Resilient Core Growth, Structural Tailwinds, and Capital Allocation Support Buy Rating

In a report released today, Joanna Gajuk from Bank of America Securities reiterated a Buy rating on Option Care Health, with a price target of $40.00.

Joanna Gajuk has given his Buy rating due to a combination of factors tied to Option Care Health’s resilient earnings profile and improved visibility into future growth. The company’s 2026 EBITDA outlook, while showing around 5% growth at the midpoint, implies roughly 11% growth when excluding the impact from Stelara, even after a very strong 22% core EBITDA increase in 2025. This demonstrates that the underlying business remains robust despite facing tougher comparisons and drug-specific headwinds that are now a small portion of total revenue and gross profit. Gajuk also highlights that the modest shortfall versus her prior revenue and EBITDA estimates is largely driven by Stelara-related pressures, rather than core operations, and that margins are expected to hold steady even with a $25–35 million hit to gross profit.

Joanna Gajuk’s rating is based on the view that long-term growth drivers and capital allocation reinforce the upside case for the stock. Structural tailwinds such as an aging population, the shift of care toward lower-cost settings, and Option Care Health’s leading market position support a continued low-double-digit core EBITDA growth profile over time. Reflecting increased confidence in the outlook and the company’s ability to offset Stelara biosimilar and pricing headwinds, she raises the valuation multiple used in her model and maintains a price objective above the current share price. In addition, the board’s decision to expand the 2025 share repurchase authorization from $500 million to $1 billion, following approximately $307 million of buybacks already executed, underscores strong free cash flow generation and management’s confidence in the business trajectory, further supporting the Buy recommendation.

Gajuk covers the Healthcare sector, focusing on stocks such as BrightSpring Health Services, Inc., Addus Homecare, and Acadia Healthcare. According to TipRanks, Gajuk has an average return of 1.3% and a 55.13% success rate on recommended stocks.

In another report released today, TipRanks – DeepSeek also reiterated a Buy rating on the stock with a $35.00 price target.