On Monday, BofA Securities expressed increased confidence in Oscar Health Inc (NYSE:OSCR), raising the company's share price target from $22.00 to $25.00 while maintaining a Buy rating. The adjustment follows discussions with Oscar Health's CFO, Scott Blackley, at a recent Healthcare Conference hosted by BofA Securities.
During the conference, it was highlighted that Oscar Health views the exchange market as more stable than it has been in years. The company observed a rationalization in the competitor landscape, notably with the exit of other disruptive entities such as Bright and Friday. This change is believed to have led to more consistent margins and pricing among carriers.
The company remains cautious about the year's outlook, noting it's too early for full visibility. However, Oscar Health anticipates that risk adjustment accruals, as a percentage of premiums, will likely increase throughout the year. This expectation is linked to the changing mix resulting from growth in Special Enrollment Period (SEP) sign-ups.
The raised price target reflects BofA Securities' heightened confidence in Oscar Health's utilization trends. The new target is based on a 30x projected 2026 earnings per share (P/E) multiple, an increase from the previous 26x. The firm's optimism is grounded in the current stability and rationality observed in the market, which supports Oscar Health's business model and financial outlook.
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