Concentra Group Holdings Parent, Inc. (NYSE:CON) shares are trading higher today. Deutsche Bank analyst Justin Bowers initiated coverage on the stock with a Buy rating and a price target of $29.
The analyst writes that the stock could achieve a 20-30% IRR over the next 2-3 years, driven by continued execution and narrowing the discount to peers.
Concentra stands out as a high-quality healthcare services asset with mid-teens FCF per share growth potential, thanks to its scale, market dominance, top facility margins, and strong management execution, adds the analyst.
Bowers says that Concentra’s center-level margins significantly surpass peers’, and its inorganic growth is expected to accelerate, given its balance sheet strength and ability to execute M&A at low to mid-single-digit EBITDA multiples post-synergy.
The company generates high free cash flow (over 1x net income), facilitating rapid de-leveraging and robust reinvestment, adds the analyst.
The analyst estimates that the recent fee schedule increase in Florida will boost 2025 revenue by 1.4%-1.8%, enhancing the margin of safety for their 2025 estimate.
Price Action: CON shares are up 0.38% at $23.50 at the last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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