Citi not dismissing Cano investor group’s ability to enact change

Cano Health disclosed this morning that forrmer Directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold entered into a group agreement by which they agreed to act together to implement changes at the company, including the replacement of CEO Marlow Hernandez, sale of non-core assets, and other ways to enhance shareholder value, Citi analyst Jason Cassorla tells investors in a research note. The firm is not dismissive of the group’s efforts, particularly as investors have reservations regarding Cano management’s capacity to navigate the public markets and forecast non-core market performance. It continues to view Cano’s model as "favorable outright," but says more meaningful price appreciation will likely be a function of execution and proof points that its model can generate sustainable profitable growth over time. It keeps a Buy rating on the shares with a $5 price target.