Agilon Health initiated with a Neutral at Citi

Citi initiated coverage of Agilon Health with a Neutral rating and $6 price target. The analyst says Agilon is in a “precarious position,” as it currently has very little flexibility in its model since it is 100% dedicated to full capitation in Medicare Advantage. To become profitable, the market environment will have to materially improve, which is unlikely, or Agilon must renegotiate its contracts, the analyst tells investors in a research note. Citi does not think Agilon has the negotiating power to materially improve its contracts.