Our $5.75 target price contemplates a 5x medical margin multiple on our FY26 Medical Margin estimate. This is in-line with AGL’s 2-year average multiple and still a 40% discount to where AGL traded in 2023 (prior to much of the MA disruption).  

We rate AGL High Risk given utilization and regulatory pressures.


Other downside risks to our target price being achieved include:
• Wage inflation
• Failure to retain and recruit physicians
• Inability to keep medical costs low
• Patient leakage from competition
• Retroactive trend adjustments could impact profits
• Continued negative impact of supplemental benefits
• Ownership concentration.