Barclays initiates Astrana Health, noting risks on pending acquisition

Brokerage Barclays initiates healthcare service provider Astrana Health's ASTH.O coverage with rating "equal-weight"

Brokerage sets PT at $36, representing 20.6% upside to the stock's last close

Brokerage says the pending deal to acquire Prospect Health is the largest in the company's history, and the near-term execution risks are real given the scale, complexity and associated debt burden

"This creates an overhang that tempers our excitement for improving industry dynamics and leaves us on the sidelines for now" - Barclays

ASTH said in November it entered into a definitive agreement to acquire clinical care provider Prospect Health for $745 million

Barclays says ASTH is well-positioned to capture improving Medicare Advantage rates, which could potentially reduce costs

Ten of 12 brokerages rate the stock "buy" or higher, 2 "hold"; their median PT is $50.45, according to data compiled by LSEG

Stock has fallen 6.1% YTD