PACS: Strong 1Q26 beat and raise reinforces conviction; Reiterating PACS as a top pick

研报英文原文证据摘录

PACS: Strong 1Q26 beat and raise reinforces conviction; Reiterating PACS as a top pick

PACS Group, Inc.

Target/Upside/Downside Scenarios Investment summary

Our Outperform rating on PACS shares reflects thePACS Group, Inc.

company’s history of providing superior quality post-acute

60 109 Weeks 10APR24 - 12MAY26 care while building density in under-bedded markets.

50 TARGETTARGET 52.0052.00 PACS’ local leaders are incentivized and empowered to

40 CURRENTCURRENT 41.0141.01 drive quality patient outcomes while establishing durable

partnerships with payors and local health systems. The

30 company’s proven acquisition strategy focuses on turning

20 around underperforming SNF facilities by installing higher

10 acuity capabilities that resonate with managed care partners

0 and referring physicians in the community. We believe PACS'

40m 30m larger peer ENSG serves as a proof-point for these operating

20m 10m and growth strategies, and see a strong case for multiple

2024 2025 2026 A M J J A S O N D J F M A M J J A S O N D J F M A M convergence with ENSG as PACS continues to build density in

PACS US Rel. S&P 500 COMPOSITE MA 40 weeks its younger markets and grows its real estate portfolio.

Source: Bloomberg and RBC Capital Markets estimates for Target

Valuation With focus on the building capabilities in higher acuity,

Our $52 price target is based on a lease-adjusted enterprise higher value skilled nursing care, we believe PACS is well

multiple of 11.0x our FY27 adjusted EBITDAR-MI estimate. aligned with where healthcare is headed in terms of pay-for-

We believe our target multiple represents an appropriate performance and pay-for-value. Orientation toward quality

discount to PACS's closest and larger peer ENSG. We are outcomes in our view cements PACS staying power in a