Oak Street Health Drops 5% in Pre-Market On Larger 2Q Loss

Shares of Oak Street Health are down about 4.8% in pre-market trading after reporting 2Q loss of $72.53 per share. Analysts anticipated a loss of $0.16 per share. Meanwhile, the health care provider’s revenues of $214.4 million were in line with analysts’ estimates and increased 69% year-over-year.

Oak Street’s (OSH) CFO Tim Cook said “Since the end of the second quarter, we have executed several strategic initiatives.” Apart from the successful initial public offering on Aug. 6, the company announced a strategic collaboration with retail behemoth Walmart on Sept. 1 “to bring Oak Street Health centers to three Walmart locations in the Dallas-Fort Worth area later this year.” The company also opened 12 new centers in the last six weeks alone, bringing the total footprint to 66 centers.

For 3Q, Oak Street expects revenue in the range of $210 million to $214 million. Full-year revenues are forecast in the range of $843 million to $853 million. (See OSH stock analysis on TipRanks).

On Aug. 31, Piper Sandler analyst Sean Wieland initiated coverage on the stock with a Buy rating and a price target of $54 (30.1% upside potential). Wieland said that the “underpenetrated” total addressable market is likely to support “durable growth over the next two decades.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 6 Buys and 1 Hold. The average price target of $55.50 implies upside potential of about 33.7% to current levels. Shares have gained 6.4% since the company’s listing on NYSE.

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