- RBC Capital Markets raised the price target on Acadia Healthcare Company Inc ACHC to $94 from $84 with an Outperform rating unchanged.
- The analyst updated the model for Q2 earnings and management's guidance raise, which reflects a tighter range, as well as $8.6 million of provider relief proceeds received in the second quarter.
- With development activity tracking to plan, the target enterprise multiple of 15x remains in line with levels achieved amid accretive domestic expansion activity before the company's (now divested) UK acquisitions.
- RBC says Acadia Healthcare posted solid Q2 earnings with adjusted EBITDA of $165.9 million coming in ahead of expectations, even after excluding $8.6 million of provider relief funds.
- "We are encouraged to see ACHC's strong reimbursement trends in Q1 continue through the half, with SS revenue per patient day growing 7.8% in 2Q22, above overall nursing wage inflation in the 5-6% range.
- The management raised FY23 adjusted EBITDA guidance to $591.5-621.5 million (from $575-610) and raised the low end of its revenue guidance to $2.56-2.60 billion (from $2.55-2.60 billion).
- RBC says that the raised guidance reflects continued cost management amid a difficult backdrop and sustained progress with bed expansions, de novo, and joint venture development activity. The analyst raised the FY22 adjusted EBITDA estimate to $606.4 million (from $593.7 million), approximating the midpoint of management's revised range.
- Price Action: ACHC shares are down 1.44% at $81.72 during the market session on the last check Monday.
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