HealthEquity price target raised to $125 from $110 at BofA

BofA raised the firm’s price target on HealthEquity (HQY) to $125 from $110 and keeps a Buy rating on the shares following “a strong quarter” with revenue and EPS significantly exceeding Street expectations. The biggest focus heading into the quarter was the trajectory of fraud costs, but the firm notes that HealthEquity experienced less fraud costs each month in Q1 and believes the company has put in place “the right guardrails to slow this activity on the platform.” The firm’s higher multiple reflects greater confidence fraud costs are under control and underwrites some benefits from legislation not embedded in its estimates, the analyst tells investors.