Acadia Healthcare cuts FY 25 EPS view to $1.94-$2.04 from $2.35-$2.45

Consensus $2.35. The company states: “Acadia Healthcare (ACHC) announced an update to its professional and general liability reserves, following its annual, third-party actuarial review of anticipated PLGL costs. This update reflects higher expected expenses associated primarily with patient-related litigation. As a result, the Company now expects full-year 2025 Adjusted EBITDA in the range of $601 million to $611 million, compared to its prior guidance of $650 million to $660 million, reflecting an incremental $49 million of PLGL expense identified in the final actuarial report. Adjusted earnings per share guidance has also been revised to $1.94 to $2.04, down from the previous range of $2.35 to $2.45. Acadia expects its net PLGL liability at year-end 2025 to increase significantly from the $78 million it had on its balance sheet on December 31, 2024, to $145 million to $165 million on December 31, 2025. For 2026, PLGL expense is expected to range between $100 million and $110 million.” “As noted on our November 6, 2025, earnings call, we anticipated additional PLGL pressure in 2025 due to trends observed across our industry; however, the magnitude identified in the final actuarial report exceeded our expectations,” said Todd Young, CFO. Consistent with broader industry trends, this increase is primarily driven by: Higher expected settlement costs for claims related to policy years prior to September 1, 2024; A 168% increase in claim frequency during the 2025 policy year (September 1, 2024, to August 31, 2025) versus the 2024 policy year; Elevated incurred-but-not-reported (“IBNR”) reserves, reflecting the increased claims activity; and Less favorable reinsurance coverage terms versus prior years. Based on current trends, the Company has assumed that the number of claims for the 2026 policy year (September 1, 2025, through August 31, 2026) will remain at roughly the same level as the 2025 policy year.