Option Care Health, Inc. (OPCH) announced a secondary offering of 9.2 million shares on Tuesday. Shares dipped almost 2.4% in the after-hours trading session following the news, after closing the day up 1.1% at $28.17 on September 7.
Markedly, shares of the provider of home and alternate site infusion services have gained 154% over the past year. (See Option Care Health stock charts on TipRanks)
As per the underwritten public offering, an affiliate of Madison Dearborn Partners (the selling stockholder) will sell 9.2 million shares, which equates to 5.1% of the current shares outstanding, at $26.90 per share to the public.
After completion, Madison Dearborn Partners will hold 21.1% of the outstanding shares, compared to 26.2% held currently.
The offering is subject to certain closing conditions and is expected to close on September 9, 2021.
All the proceeds from the offering will be received by the selling stockholder, and the company will not receive any amount.
After the recent inclusion of the company shares on the S&P MidCap 400 Index, Lake Street analyst Brooks O’Neil increased his price target on Option Care Health from $27 to $35 (24.3% upside potential), and reiterated a Buy rating on the stock.
The analyst stated, though “not a fundamental development,” the addition to the index indicates that “the performance of the company and the stock are opening doors to new investors.”
Consensus among analysts is a Strong Buy, based on six unanimous Buys. The average Option Care Health price target of $27.08 implies 3.9% downside potential to current levels.
TipRanks data shows that financial blogger opinions are 100% Bullish on OPCH, compared to a sector average of 71%.
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