Despite 28% drop, Barclays sees more Healthways downside

Barclays Capital analyst Josh Raskin says bargain hunters shouldn't take a flier on Healthways just yet — even though the stock is off almost 30 percent today. On the back of Healthways' disappointing Q3 numbers, Raskin has lowered his price target for Healthways shares from $14 all the way down to $9. Healthways hasn't traded in the single digits in 11 months and the lack of a bounce off this morning's open (see chart below) suggests few investors expect a rebound back toward $20 anytime soon.

Brooks O'Neil at Dougherty & Co. is willing to cut Healthways CEO Ben Leedle and his team a little more slack. He has cautiously reiterated his 'buy' rating but trimmed his target to $17 from $22. The biggest issue, O'Neil says, is the loss of credibility.

Management had hinted at this issue in a recent conference presentation, but our sense was the overall outlook presented by management has continued (until yesterday) to be upbeat. Thus, we are sure investors have been largely surprised by the magnitude of the shortfall for 2013, and the weak expectation for 2014.