Premier downgraded to Hold on rising fee share at Canaccord

Canaccord last night downgraded Premier to Hold from Buy with a price target of $21, down from $27. Although Premier beat fiscal Q3 estimates handily, guidance was only reiterated and preliminary fiscal 2025 thoughts provided “some caution” as fee share is expected to reset again and now eventually reside in the low 60% level, the analyst tells investors in a research note. The firm says that while management believes that its tech-centric offering provides differentiation, given the current challenging environment for health systems, there may be elevated risk that pricing plays more of a role in decision making. As such, it believes Premier’s fee share negotiations could remain challenging and ultimately further pressure fee share over time.