Pgiam/iStock via Getty Images
- Shares of Agiliti (NYSE:AGTI) fell ~11% on Tuesday after Bank of America downgraded the healthcare services provider to Underperform from Neutral, citing a lack of visibility into the company's near-term organic growth.
- Analyst Kevin Fischbeck pointed out that Eden Prairie, Minnesota-based Agiliti (AGTI), with its Q2 2023 results, missed the consensus estimates for adj. EBITDA and lowered its outlook for adj. EBITDA by 12%.
- Noting that the company cited lower peak need rentals utilization and higher onboarding costs from newer contracts as reasons for the downgrade, the analyst expects headwinds to continue in the near term.
- "It isn't fully clear when utilization will normalize nor when the contracts will reach optimal margins," Fischbeck wrote, projecting the issues to persist at least for the next six months and even longer.
- That can lead Agiliti (AGTI) to underperform relative to its rivals in the sector, the analyst added, slashing his price target on the stock to $11 from $18 per share.