ARDT Stock Forecast & Price Target

Ardent Health is positioned for positive financial growth with management projecting an improvement of 100-200 basis points in margins over the next 3-4 years due to ongoing supply chain optimization initiatives. Additionally, the company has successfully reduced contract labor costs, with a decline of 60 basis points year-over-year, resulting in strengthened nursing retention rates which support operational efficiency. Improved supply expenses as a percentage of revenue, which dropped by 60 basis points year-over-year to 17.3%, further enhances Ardent's financial outlook amidst increasing inpatient volumes.

Ardent Health Inc. faces a challenging outlook due to an anticipated 5% decline in adjusted EBITDAR for 2025, coupled with a projected multiple contraction to 5.0x, which falls significantly below its peer range. The company's downside scenario suggests a price of $12, predicated on its inability to meet ambulatory expansion goals and achieve organic volume targets, raising concerns about patient engagement efforts. Additionally, the target multiple for Ardent continues to represent a discount relative to both the average of its public peers and its closest competitor, CYH, further highlighting potential weaknesses in its financial positioning.