UBS analyst Joshua Chan maintained a Hold rating on Bright Horizons today and set a price target of $112.00.
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Joshua Chan has given his Hold rating due to a combination of factors that influence Bright Horizons’ current market position. The company’s recent performance in Backup Care has been strong, with significant year-over-year growth, which is expected to continue into the third quarter. However, the Full Service segment shows a moderation in enrollment growth, which is a concern for investors as it may fall below historical levels.
Despite the intriguing valuation of the stock, Chan notes that the lack of a clear enrollment growth floor and limited visibility into stronger center count growth create uncertainty. This uncertainty, combined with the recent stock price decline, suggests that while there is potential, more fundamental conviction is needed before taking a more optimistic stance. Therefore, Chan adjusts the price target to $112 from $138, reflecting a cautious but balanced outlook.