Oak Street could be worth over $49 per share in buyout, says Piper Sandler

Piper Sandler analyst Jessica Tassan raised the firm’s price target on Oak Street Health (OSH) to $47 from $43 and keeps an Overweight rating on the shares. The analyst believes Oak Street could command a 4.3-times multiple, or $13.3B enterprise value, in a takeout based on One Medical’s acquisition of Iora Health in June of 2021. If CVS Health (CVS) were to acquire Oak Street for 4.3-times revenue, it would imply a takeout price of $49.67 per share, Tassan notes. The analyst, however, says her thesis is fundamental not event-driven. She expects Oak Street to continue to scale its national network of senior-focused primary care centers and sustain double-digit growth over the next two decades. The new price target implies $11.3B enterprise value and 59% upside to yesterday’s close. The stock is trading at a significant discount to intrinsic value, says Tassan, who would remain a buyer of the name.