BofA Downgrades Alignment Healthcare Following CMS Star Rating Reduction
On Friday, BofA Securities downgraded Alignment Healthcare (NASDAQ: ALHC) to Neutral from Buy after the Centers for Medicare & Medicaid Services (CMS) reduced its Star Rating for a major California Medicare Advantage contract. The rating dropped to 3.5 stars from 4, which could affect the company's competitiveness and enrollment in this key segment. In response to the downgrade, BofA also lowered its price target for Alignment Healthcare shares from $25 to $9, reflecting an estimated upside of around 19%. The move signals concerns about potential impacts on revenue or market share due to lower Star Ratings affecting Medicare Advantage plan performance and consumer perception. The change in rating could influence investor sentiment toward the stock as it relates to regulatory evaluations that are critical for healthcare providers operating under government contracts.
Tickers: $ALHC