Analyst Joanna Gajuk of Bank of America Securities maintained a Buy rating on Select Medical (SEM – Research Report), reducing the price target to $22.00.
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Joanna Gajuk’s rating is based on several positive aspects of Select Medical’s operations and future prospects. The company has shown resilience in overcoming challenges in its Long Term Acute Care (LTAC) segment, which were primarily confined to the first quarter. This was due to temporary regulatory impacts, such as the 20% Rule and increased outlier thresholds, which are expected to be less of an issue going forward. Additionally, there is optimism that these regulatory challenges could be mitigated or reversed, providing further relief to the company.
Moreover, Select Medical’s Inpatient Rehabilitation Facility (IRF) segment continues to perform exceptionally well, with strong occupancy rates and successful joint ventures that enhance profitability and growth. The company is also focusing on expanding its IRF capacity, which is expected to drive further revenue and profit growth. In the Outpatient Rehab segment, cost efficiencies are being implemented to counteract Medicare rate cuts, and potential legislative changes could lead to a positive rate update. These factors collectively support a positive outlook for Select Medical, justifying the Buy rating.
In another report released on May 7, RBC Capital also maintained a Buy rating on the stock with a $19.00 price target.
Based on the recent corporate insider activity of 39 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 SEM in relation to earlier this year.