ORGO - Morgan Stanley starts Organogenesis at equal weight cites reimbursement issues

2023-06-15 17:26:47 ET

Morgan Stanley initiated coverage of Organogenesis ( NASDAQ: ORGO ) with an equal weight rating, citing concerns about reimbursement for its wound care products in certain settings.

The investment bank said that the upcoming release of the Centers for Medicare and Medicaid Services' physician fee schedule for fiscal 2024 could "dramatically alter how skin substitutes are reimbursed in the office setting."

Morgan Stanley added that while the stock's valuation is "undemanding," it believes investors can be "patient ahead of upcoming CMS reimbursement proposals, competitive pricing headwinds, and higher insider ownership implying eventual exits."

The investment bank has a $5 price target on the stock.

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