What Happened?
Shares of senior living provider Brookdale Senior Living (NYSE: BKD) fell 3.8% in the afternoon session after a competitor, Acadia Healthcare (ACHC), significantly cut its 2025 financial outlook, triggering a sell-off across the healthcare facilities sector. Acadia announced that its professional and general liability expenses for 2025 were projected to be about $116 million, more than double the $54 million from 2024. This dramatic increase in costs forced the company to lower its adjusted earnings guidance for 2025 to a range of $1.94 to $2.04 per share, a steep decline from $3.30 in 2024. The news raised concerns that other operators in the industry, like Brookdale, might face similar pressures from rising liability claims. Compounding the issue, an analyst at Cantor Fitzgerald lowered the price target on Acadia's stock from $22.00 to $17.00.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Brookdale? Access our full analysis report here.
What Is The Market Telling Us
Brookdale’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 3.9% on the news that reports revealed the Trump administration considered extending the Affordable Care Act (ACA) subsidies. These subsidies, which are government financial aids to help people pay for health insurance, are crucial for insurers as they maintain a stable customer base. An extension would ensure continued revenue for companies with significant exposure to the ACA marketplace. The news prompted a strong positive reaction from investors, with Centene (CNC) shares jumping as much as 8%, Molina Healthcare (MOH) rising over 3%, and Oscar Health (OSCR) soaring 18%. The potential for a two-year extension reduces regulatory uncertainty for the sector, which investors view as a significant positive for the industry's outlook.
Brookdale is up 109% since the beginning of the year, and at $10.58 per share, it is trading close to its 52-week high of $11.25 from November 2025. Investors who bought $1,000 worth of Brookdale’s shares 5 years ago would now be looking at an investment worth $2,431.
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