Barclays downgrades Addus to Underweight on ‘materially negative’ regulation

Barclays analyst Andrew Mok downgraded Addus HomeCare to Underweight from Equal Weight with a price target of $83, down from $88. The analyst views the final rule announced by the Department of Health and Human Services as “materially negative” for Addus. While the rule is not scheduled to go into effect until 2030, if implemented today, the regulation would result in a 35% decrease to the company’s 2025 EBITDA before potential offsets, the analyst tells investors in a research note. The firm sees an unfavorable risk/reward that skews to the downside and believes the “long implementation period is likely to weigh on the company’s valuation and complicate industry consolidation.”