Investing.com -- Shares of Acadia Healthcare Company Inc (NASDAQ:ACHC) rose in pre-market trading Tuesday following an upgrade by KeyBanc Capital Markets, which raised the stock's rating to "overweight."
The analysts said that the company's potential for a strong recovery in 2025, supported by its expected EBITDA growth in 2026.
KeyBanc analysts cited the company's undervaluation relative to historical norms and its promising outlook for 2026 EBITDA growth as critical factors for the upgrade.
They noted that Acadia is trading at approximately 8x EBITDA, below its historical average of over 10x, and expect this gap to narrow.
They set a price target of $70, reflecting a 10x multiple on the projected 2026 EBITDA, compared to its three-year average range of 8–10x.
The analysts outlined that Acadia’s 2026 performance is likely to benefit significantly from the maturation of bed additions made in 2024–2025, alongside moderating startup costs.
The brokerage also flagged a potential inflection point for the stock as investor sentiment improves and visibility into the company’s recovery becomes clearer in the latter half of 2025.
While KeyBanc's revised 2025 EBITDA estimate of $735 million is lower than the Street's $770 million consensus, they believe this already aligns with buy-side expectations.
This conservative outlook provides a favorable setup for Acadia to exceed guidance if external pressures subside.
Additionally, any resolution of volume disruptions from late 2024, combined with potential regulatory tailwinds such as Medicaid Directed Payment Programs, could amplify gains.
In a broader context, KeyBanc described 2024 as a challenging year for behavioral health providers like Acadia, marked by negative press and heightened scrutiny.
However, the analysts asserted that investor anxiety has likely peaked, as reflected by the stock’s resilience following a recent negative New York Times (NYSE:NYT) article.
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