WELL Health Technologies named “Canada Best Idea” at TD Cowen

TD Cowen analyst David Kwan says WELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News, Analysts, Financials TSX:WELL) remains underappreciated despite strong execution.

In TD Cowen’s September Canada Best Ideas report, Kwan maintained his “Buy” rating and $7.00 target on WELL.

“With the stock only up slightly YTD, despite its strong execution, we think the WELL story is underappreciated,” Kwan said.

The analyst said monetizing WELL’s U.S. assets remains the key catalyst because it would simplify the story, help fund clinic acquisitions, reduce leverage and potentially support share buybacks.

Kwan said WELL continues to perform well in its Canadian healthcare business, supported by double-digit growth and margin expansion in its clinic operations and WELLSTAR healthcare technology business.

He expects increased scale and AI-enabled efficiency gains to drive further margin expansion, with M&A adding to organic growth.

The planned divestiture of U.S. assets has taken longer than expected, but Kwan said it should put WELL on a path to becoming a Canadian healthcare pure play.

“We believe WELL remains well positioned to strengthen its leadership in the fragmented Canadian clinic market, and continue to view its disciplined, capital-efficient clinic consolidation strategy as an important driver of long-term growth,” he said.

Potential catalysts include monetization of U.S. businesses, including CRH, Provider Staffing, Circle and Wisp, over the next year, along with a WELLSTAR spinout or RTO in the coming weeks.

Kwan said his $7.00 target is based on a sum-of-the-parts valuation and implies 14.3 times his calendar 2027 Adjusted EBITDA estimate.

The analyst argued that WELL’s shares could begin to re-rate as the U.S. businesses are monetized.

“We think there could be >50% upside to WELL’s current valuation multiple (EBITDA) once the U.S. businesses have been divested,” Kwan said.

Kwan expects WELL to generate Adjusted EBITDA of $190.3-million on sales of $1.61-billion in fiscal 2026, improving to Adjusted EBITDA of $209.9-million on sales of $1.79-billion in fiscal 2027.

Disclosure: WELL Health is an annual sponsor of Cantech Letter and Nick Waddell owns shares of the company.

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