:max_bytes(150000):strip_icc()/GettyImages-2227884132-918ef92641d14a92ae8f5c40f92770e0.jpg "Why This Health Care Stock Has Gained 35% This Week")
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Key Takeaways
- Oscar Health shares popped again Wednesday, and have gained 35% over the past three days.
- Piper Sandler analysts upgraded their rating on the health insurer, and said it should be able to gain market share and improve profitability even if ACA subsidies expire at the end of the year.
Shares of Oscar Health (OSCR) jumped Wednesday, the latest big gain for the health insurer after Piper Sandler analysts upgraded their rating of the stock in a recent note to clients.
The analysts upgraded their rating to “overweight,” and lifted their price target to $25 from $13 previously. Piper Sandler is now the lone “buy” rating on Oscar among the six analysts tracked by Visible Alpha, alongside one “hold” and four “sell” ratings, and an average price target of $15.
Oscar shares were up 9% in late trading Wednesday at around $18.20, and have gained about 35% this week alone.
Oscar and several other health-related stocks surged Monday following a report that the White House was considering including an extension of subsidies that lowered the cost of Affordable Care Act plans in its yet-to-be-released plan to revamp the U.S. health care system.
Why This Matters
The extension of Affordable Care Act subsidies would lower costs for millions of Americans and help health care companies by keeping enrollment rates steady. Oscar Health appears well-positioned to navigate any policy scenario, according to analysts at Piper Sandler.
The Piper Sandler analysts said that even if those subsidies expire at the end of this year, they think Oscar could grow both its market share and profitability. That’s because the company has “designed and priced CY26 products to perform in adverse operating environment,” and is currently “executing against a thoughtful education and enrollment campaign” for the open enrollment period for 2026.
“We think OSCR is entering a compelling two year earnings recovery in the worst case secular scenario,” the analysts wrote. “We believe OSCR management is capable of designing and pricing product to perform in any policy regime. We believe CY26 products have been designed and priced to perform in a worst case secular scenario.”
Before its recent rally, the stock had been near unchanged for the year. With the latest gains, Oscar shares are handily outpacing the performance of the S&P 500 year-to-date.
