Wells upgrades Pennant Group on potential reimbursement upside

Wells Fargo analyst Stephen Baxter upgraded Pennant Group (PNTG) to Overweight from Equal Weight with a price target of $31, up from $29. The firm sees upside in the stock even with conservative home health reimbursement rate assumptions. Materially improved reimbursement rates provide a a “nearly free” call option at current valuation levels, the analyst tells investors in a research note. Wells says the worse than expected proposed rule for 2026 home health rates has been an overhang on Pennant shares.