HPE Announces Governance Shake-Up with New Strategy Committee and Robert Calderoni Appointment

Truist has reduced its price target for Aveanna (AVAH) from $6 to $5 and maintained a Hold rating, citing sector trends and challenges in Managed Care. Despite these challenges, the firm remains optimistic about the healthcare sector's long-term outlook. Aveanna's Q2 results show a 14% revenue increase to $559 million, with adjusted EBITDA up 93.1% to $67.4 million. The company has a revenue outlook of over $2.15 billion for 2025 and adjusted EBITDA outlook of over $207 million.

Investing.com reports that Bank of America (BofA) has downgraded multiple healthcare stocks, citing significant risks to growth stemming from the recently signed U.S. reconciliation bill. The bank downgraded HCA Healthcare (NYSE:HCA) to Neutral and downgraded Centene (NYSE:CNC), Universal Health Services (NYSE:UHS), and privately held Ardent Health to Underperform due to exposure to Medicaid and exchange coverage losses [1].

The reconciliation bill introduces funding cuts that BofA believes are not yet reflected in consensus estimates or share prices. The bank warns that the shift from regulatory tailwinds to headwinds could be more meaningful than investors realize. While hospital fundamentals remain solid for 2025, BofA expects investor sentiment to weaken in the second half of this year as attention shifts to the longer-term impact [1].

The bill is projected to shave 1-3% off annual EBITDA growth for hospitals through 2030, effectively halving the sector's historical growth rate. Among hospitals, BofA sees HCA as relatively well-positioned but sees limited upside following recent gains. Tenet Healthcare (NYSE:THC) remains the firm's preferred pick due to its ambulatory surgery center business, which is largely insulated from the cuts [1].

For managed care, large caps such as UnitedHealth (NYSE:UNH), Cigna (NYSE:CI), and Humana (NYSE:HUM) are seen as relatively protected, but Medicaid-heavy names like Centene, Molina, and Oscar Health face steeper headwinds. Centene, in particular, could see a 6% impact to 2027 estimates, prompting its downgrade and estimate cuts [1].

Meanwhile, Truist has reduced its price target for Aveanna (AVAH) from $6 to $5 and maintained a Hold rating, citing sector trends and challenges in Managed Care. Despite these challenges, the firm remains optimistic about the healthcare sector's long-term outlook. Aveanna's Q2 results show a 14% revenue increase to $559 million, with adjusted EBITDA up 93.1% to $67.4 million. The company has a revenue outlook of over $2.15 billion for 2025 and adjusted EBITDA outlook of over $207 million [2].

References:
[1] https://www.investing.com/news/stock-market-news/bofa-downgrades-health-care-stock-on-fallout-from-reconciliation-bill-4138101
[2] https://www.trust.com/news/aveanna-price-target-reduction