R1 RCM a ‘compelling takeout target at these levels,’ says Citi

Citi analyst Daniel Grosslight says the main contentions in R1 RCM‘s short-seller report are “off-base.” The firm likes the stock’s risk/reward at current levels and keeps a Buy rating on the shares with a $20 price target. Citi does not see near-term downside to incentive fees as its channel checks indicate many of the integration issues have been resolved and it does not think the recent financial troubles at Quorum Health or Ascension will have a significant impact on R1’s financials. Over the next three months, R1 RCM’s earnings and new business wins will be positive catalyst, the analyst tells investors in a research note. Citi also thinks R1 “makes a compelling takeout target at these levels.”