Following three straight sessions of gains, the shares of Oak Street Health Inc. (NYSE:OSH), an operator of primary care centers for Medicare beneficiaries, fell on Monday after Goldman Sachs downgraded the company to Neutral from Buy, citing uncertain growth prospects.
The analysts Jamie Perse and the team also lowered the OSH price target to $29 from $32 per share, pointing to a cautious outlook due to growth profitability constraints.
The team wrote that the company’s current growth rate of adding 20 – 30 centers annually in 2023 and beyond is likely to require “more cash than is currently available, and we expect lack of visibility on this to be an overhang.”
The downgrade comes amid speculation that health services companies such as OSH could be the next M&A targets after Amazon (AMZN) agreed to acquire membership-based primary care platform One Medical (ONEM) in July for nearly $3.9B.