UPDATE: Piper Jaffray Upgrades Healthways to Overweight, Raises PT on ACO Opportunity

In a report published Monday, Piper Jaffray analyst Sean W. Wieland upgraded the rating on

from Neutral to Overweight, and raised the price target from $11.00 to $19.00. In the report, Piper Jaffray noted, “We are upgrading HWAY to Overweight and raising our price target from $11 to $19 because we believe HWAY will be a leader in the rapidly growing population health management segment. Provider organizations launching Accountable Care Organizations (ACOs) are challenged with managing risk to be successful under new value-based payment formulas. Based on our analysis of 630 registered ACOs, the penetration rate for population health management is minimal. Healthways is the domain expert in population health management, yet has less than a 1% market share in this $1 billion per year opportunity. While we are not changing our estimates yet, we believe this is the appropriate time to upgrade HWAY as we think ACOs are maturing enough to start thinking about their plans for population health management solutions and the increased ACOs' deal flow should bring investors' attention to the company.” Healthways closed on Friday at $13.45.