Select Medical stock price target raised by RBC Capital to $20 on regulatory relief

 RBC Capital has raised its price target on Select Medical Holdings (NYSE:SEM) to $20.00 from $16.00 while maintaining an Outperform rating.

The firm cited "significant dislocation" in Select Medical shares, creating what it views as an attractive entry point as regulatory headwinds begin to lift for the healthcare provider. 

RBC Capital specifically noted the Centers for Medicare & Medicaid Services’ (CMS) decision to delay implementation of the 20% transmittal rule, which the analyst interprets as indicating receptivity to industry concerns regarding recent changes in long-term acute care (LTAC) reimbursement.

The firm expects Select Medical to record a one-time benefit in the third quarter of 2025 that will offset a portion of the LTAC reimbursement headwind recorded through the first half of 2025.

The higher price target reflects both easing regulatory headwinds and what RBC Capital considers a more appropriate LTAC multiple assumption going forward, giving the firm added confidence in its "street-high" 2025 adjusted EBITDA estimate for Select Medical.

https://www.investing.com/news/analyst-ratings/select-medical-stock-price-target-raised-by-rbc-capital-to-20-on-regulatory-relief-93CH-4276634