Truist Securities has reaffirmed its Hold rating on American Well Corporation, the US-based telehealth platform, with a price target of $7.50 per share. The decision comes as the company continues to navigate a shifting landscape in digital healthcare, where pandemic-era tailwinds have faded and investors are increasingly focused on sustainable profitability.
American Well, which operates the Amwell platform, saw its share price surge during the height of Covid-19 as remote consultations became the norm. However, like many telehealth firms, it has since struggled to maintain that momentum. The stock has traded well below its 2021 highs, with the current price hovering around the $7.50 target level set by Truist.
Analysts at Truist noted that while American Well has made progress in cutting costs and securing strategic partnerships, revenue growth has slowed. The company reported a decline in quarterly sales earlier this year, reflecting a broader normalisation of demand as patients return to in-person visits. Truist's Hold rating suggests they see limited upside from current levels, but also limited downside risk.
For UK investors, the read-across is significant. The London-listed telehealth sector, including firms such as Push Doctor and Babylon Health (now part of eMed), faces similar pressures. The FTSE 100 and FTSE 250 have seen healthcare technology stocks underperform the wider market, with the FTSE 250 falling 0.4% in recent trading as investors rotate into more defensive sectors.
Paul Marsden, a healthcare analyst at Shore Capital, commented: 'The telehealth space is at a crossroads. Companies that can demonstrate a clear path to profitability will be rewarded, but those still burning cash may continue to struggle. American Well's Hold rating reflects that uncertainty.'
Source: Truist Securities research note.