Option Care Health, a leading provider of home and alternative site infusion services, has recently been assigned a Neutral rating with a price target of $26.00 by UBS.
UBS expresses caution due to uncertainties surrounding planned changes to STELARA, a key specialty drug in Option Care's portfolio. These changes could impact the company's revenue streams and make it difficult to endorse their growth targets.
UBS projects more conservative revenue and adjusted EBITDA figures for 2025 compared to Option Care's own targets. UBS also expects Option Care's valuation to stabilize around 10 times EV/EBITDA, reflecting the challenges posed by market dynamics and regulatory changes.
The shift towards home health services presents a favorable environment for Option Care, but the anticipated changes to STELARA remain a critical factor to monitor.
Option Care has strategic opportunities for growth, including its diversified pharmaceutical portfolio and potential mergers and acquisitions. However, the industry faces challenges such as regulatory changes, reimbursement pressures, and evolving patient expectations.
Investors will need to consider these factors and Option Care's ability to adapt and manage its portfolio in order to assess its future success.