Shares of Healthways, a Franklin-based health management company, edged almost 5 percent lower on Thursday, two days after a Goldman Sachs analyst said the firm could be a takeover target now that its stock is so low-priced.
Analyst Daryn Miller sees headwinds for Healthways, saying that employers who have been increasingly skeptical about the benefits of disease management programs are more likely to cut back on spending amid a nationwide economic downturn.
More health plans that had hired Healthways to offer support and advice to members via telephone conferences and other means are bringing such offerings in-house to save money.
Healthways' stock fell nearly 22 percent in a single day last month after the company said it would earn much less in its fiscal first quarter than analysts had forecast. On Thursday, the stock fell 92 cents a share to close at $18.39 in trading on Nasdaq. Its 52-week high on Wall Street topped $71 a share as recently as early January.
Ryan Daniels, an analyst at William Blair & Co. in Chicago, said a sale was more likely because shareholders might be more willing to accept a deal after recent weakness in the stock.
"More of my clients are wondering if it will happen," Daniels said Thursday. "The fact that the company still has a great, broad product/service offering probably does make (it) a target."
But Thomas Carroll, an analyst at Stifel Nicolaus in Baltimore, said he believes that Ben R. Leedle Jr., the company's relatively young chief executive officer, doesn't want to sell out.
A call to Healthways wasn't returned on Thursday.
Earlier this year, Leedle said that staying independent was the best way to achieve the company's goals.
Carroll said that if Healthways were to sell, a pharmacy benefits manager would be the most likely buyer. "Then, maybe a company like Walgreens," he said. "Probably not a managed care organization. I'd be surprised to see that."
In his report, Miller lifted his recommendation on Healthways' stock from "sell" to "neutral." But he cut his price target to $21 per share from $23, and reduced his profit expectations for fiscal 2009 through 2011.
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