Cano Health (NYSE:CANO), a value-based senior care health solutions provider, is exploring the possibility of going up for sale. The Wall Street Journal reported that health insurance provider Humana (NYSE:HUM) is eyeing a take-over of long-time partner Cano. Subsequently, Bloomberg broke the news of pharmaceutical giant CVS Health (NYSE:CVS) also being interested in buying the company. After the news broke, shares of the company shot up 32% by the end of the market’s close on Thursday, September 22.
Cano, which went public only last year, has not been doing well lately. The second quarter saw its net loss widen due to unfavorable year-over-year comparables. Despite having some upsides to growth, like its market-leading healthcare provision model, the company is said to be reviewing the interest of Humana and CVS.
Interestingly, Cano will serve more than 68,000 of Humana’s Medicare Advantage members in Florida at the end of 2021. It also has other tie-ups with Humana at 11 medical centers in Texas and Nevada.
Is Cano Health a Buy?
Turning to what the Wall Street consensus thinks, Cano is a Moderate Buy, based on two Buys and two Holds. Cano’s price target stands at $6.94% on average, which is almost 17% less than the current price.
Parting Thoughts
Given the unique market that Cano caters to (senior citizens and other underserved sections of society), the company is fast gaining clout as a leading healthcare provider in this area. The reason Humana and CVS swept in at around the same time to make an offer may not be a coincidence. And the fact that Cano is not hostile to the idea makes us think that an acquisition will only enhance Cano’s operating power.
