Analyst Josh Jennings of TD Cowen maintained a Buy rating on Avita Medical, reducing the price target to $5.50.
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Josh Jennings has given his Buy rating due to a combination of factors including Avita Medical’s strategic leadership transition and the anticipated resolution of reimbursement challenges. The appointment of Cary Vance as Interim CEO, who is an experienced industry veteran, is expected to steer the company through its current challenges with a focus on disciplined execution. Despite the recent revenue miss attributed to prolonged reimbursement issues, management believes these issues are largely resolved, setting the stage for a potential recovery in the upcoming quarters.
Furthermore, the company’s focus on its three-product wound-care portfolio, including RECELL, RECELL GO & Mini, PermeaDerm, and Cohealyx dermal matrix, is expected to drive future growth. The growing number of hospital approvals for Cohealyx and PermeaDerm is anticipated to convert into sales in late 4Q’25 and into 1Q26. If Avita can successfully restore physician confidence in RECELL reimbursement and execute its commercial strategy effectively, the company is well-positioned for a positive turnaround, justifying the Buy rating.
Based on the recent corporate insider activity of 18 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of RCEL in relation to earlier this year.