Piper views TriCare T-5 contract awards as neutral for Accolade

On December 22, the Department of Defense awarded $136B of TriCare T-5 contracts to Humana (HUM) in the East Region and TriWest in the West Region, Piper Sandler analyst Jessica Tassan tells investors in a research note. The analyst views the initial T-5 contracts t outcome as neutral for Accolade (ACCD) and reiterates an Overweight rating on the shares with a $13 price target. Heading into the T-5 contract awards, Accolade had teaming agreements with two of the three managed care organization bidders to provide certain navigation services under the new contracts, says Tassan. She believes the teaming agreements were with Humana and HealthNet. Accolade has worked with TriWest in the past and, a T-5 partnership "remains entirely possible," the analyst contends. Based on the initial T-5 contract awards, Tassan has visibility into Accolade’s partnership with Humana in the East Region. She estimates Accolade’s T-5 teaming agreement with Humana should generate $4.7M of annualized revenue, or 52% of the $9.0M Select Navigator run-rate.