Surgery Partners, the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Bill Sutherland from Benchmark Co. maintained a Buy rating on the stock and has a $35.00 price target.
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Bill Sutherland has given his Buy rating due to a combination of factors that highlight Surgery Partners’ strategic positioning and financial performance. The company has maintained its FY25 guidance for revenue and adjusted EBITDA, although it is expected to be on the lower end of the range. Despite a slower pace in capital deployment, Surgery Partners is well-positioned against macroeconomic challenges, with minimal exposure to tariff-related price increases and supply chain risks, and less than 5% of revenue coming from Medicare and Medicaid.
Moreover, the proposed phase-out of the Inpatient Only procedure list by CMS is expected to be a significant tailwind for the sector. The company has also made strides in optimizing its asset portfolio, reducing its ASC network by nearly 10% and considering joint ventures for surgical hospitals. These efforts are aimed at reducing leverage from 4.1x to a long-term target of approximately 3x, which is seen as a key to unlocking valuation. Additionally, Surgery Partners reported strong financial results in 2Q25, with revenue and adjusted EBITDA exceeding street expectations, further supporting the Buy rating.
In another report released yesterday, TD Cowen also reiterated a Buy rating on the stock with a $28.00 price target.