BHG - Bright Health downgraded at Goldman Sachs on strategic shift

• Bright Health Group ( NYSE: BHG ) plunged ~15% Tuesday after Goldman Sachs downgraded the health insurer to Sell from Neutral, citing the company's recent decision to exit from the Health Insurance Exchange (HIX).

• Following the decision to close the HIX business, "we see risks and uncertainties with its new strategic focus on NeueHealth and path to profitability," the analysts noted, referring to the company's clinical care service unit.
• Goldman Sachs thinks that with the exit from the HIX business, the company will lose a key membership driver for its NeueHealth clinics.
• Despite the low profitability of this customer group, Bright Health ( BHG ) will now have to increasingly rely on third-party payors to drive membership growth amid rising competition in the market, the analysts warned, with a $0.50 per share target on the stock.
• Wall Street has remained bullish on Bright Health ( BHG ) stock, with an average rating of Hold from analysts in line with Seeking Alpha Author ratings. However, Seeking Alpha's Quant System , which consistently beats the market, rated BHG as a Hold.

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