In a report released on May 6, Michael Cherny from Leerink Partners reiterated a Hold rating on Premier (PINC – Research Report), with a price target of $24.00.
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Michael Cherny’s rating is based on a combination of factors that reflect both positive developments and ongoing challenges for Premier. The company has shown strong performance in its Supply Chain Services, with revenue exceeding expectations and contributing to solid margins and an EBITDA beat. This positive performance is partly due to successful re-contracting efforts, which are expected to reach 80% by the end of FY25, indicating a return to stable growth prospects. However, the Performance Services segment is still undergoing a transition, and while new leadership is in place to drive improvements, the visibility into the segment’s progress remains limited.
Despite these challenges, Premier continues to be a valuable partner for its clients, helping them manage cost pressures effectively. The company has also increased its profit guidance, reflecting operational outperformance and a reduced share count. While there is potential for further growth, Cherny is cautious and prefers to see additional catalysts that could enhance growth prospects. As a result, he maintains a Hold rating, with a slight increase in the 12-month price target from $22.50 to $24, based on future EBITDA expectations.