Oak Street Health rises after Raymond James nod

 

• Trusting the management’s 40%+ CAGR targeted for the intermediate future, Raymond James initiates coverage on Oak Street Health (OSH) with an ‘outperform’ rating.
• With over 70% YoY revenue growth in both 2018 and 2019, the company operating primary care centers for Medicare beneficiaries has benefitted from “two most attractive areas within the healthcare services ecosystem: the growth in Medicare Advantage (up 7% in 2019) and value-based care,” the analysts note.
• The price target at $65 assumes “a significant upside to estimates” from the company’s Medicare direct contracting model, to be unveiled in 2021.
• Noting favorable outcomes for the company's patient populace with Medicare Advantage, the researchers highlight the ability of Oak Street Health to benefit from the growth in Medicare spending as it adds new centers.
• Since its market debut in August, the shares have risen +35%, well outperforming the 11% gain in the S&P 500.
• https://seekingalpha.com/news/3643398-oak-street-health-rises-2-after-raymond-james-nod