Tivity Health Initiated by Chardan at Neutral, Price Target Set at $40/Share

Tivity Health (TVTY) received new coverage from Chardan Capital Markets at an investment rating of neutral with a price target of $40 per share.

The price target is above the stock’s Monday closing price of $37.55 and slightly below its 52-week high of $41.55. Chardan also said it sees Tivity’s shares “as currently fairly valued and would look for a more attractive future entry point.”

Tivity Health, formerly Healthways, is a provider of fitness and health programs for seniors. In a note to clients, Chardan said it expects “strong demand for this benefit category tied to the growth of the Medicare Advantage (MA) and Medicare Supplement (MS) markets.”

The firm said its channel checks found senior consumers strongly value Tivity’s SilverSneakers product, which makes up 83% of Tivity’s revenue, as part of MA and MS health plans. “In turn, we see that managed care organizations are likely to continue and expand their offerings of the product to members,” Chardan said, adding that it would be challenging for competitors to duplicate Tivity’s provider network.

“Over all we see Tivity Health as having a strong competitive position in the market for senior fitness benefits for managed care,” the firm said, noting SilverSneakers is the market leader with an estimated eight out of the top 10 largest MA plans as customers.

By Matthew Robinson