Jefferies Downgrades ModivCare to Hold Amid Concerns Over FY2024 Guidance

The Downgrade

Jefferies recently announced a rating adjustment for ModivCare (NASDAQ:MODV), switching their recommendation to “hold.” The catalyst behind this revision stems from concerns surrounding the organization’s recently unveiled FY2024 guidance.

Reasoning Behind the Decision

The investment bank justified this shift by highlighting what they perceive as a substantial discrepancy in MODV’s anticipated 10% EBITDA performance for the fiscal year 2024. Consequently, they believe investors may adopt a wait-and-see approach until the company can demonstrate tangible progress in executing their operational strategies, especially concerning cost-saving and productivity initiatives.

Jefferies elaborated that the Q1 EBITDA guidance provided by ModivCare implies a steep incline, further denting investor confidence in the management team’s capacity to fulfill their earnings projections.

Additionally, Jefferies revealed that as part of this adjustment, they have revised their price target for ModivCare downward from $60 to $39.