Oscar Health could be primed for big gains after a tough year, according to Wells Fargo. Analyst Stephen Baxter upgraded the stock to overweight from equal weight, but lowered his price target, saying the outlook for the health insurance company appears “favorable” after the stock cratered 63% in 2022. “While the range of outcomes remains wide, we believe risk/reward skews to the upside following significant YTD underperformance,” Baxter wrote in a Tuesday note. Shares of Oscar Health came under pressure this year as investors dumped unprofitable growth names getting slammed by rising interest rates and high inflation. Still, there are several reasons for the analyst’s favorable outlook on the health insurance company as it tries to achieve total profitability by 2024. Oscar Health offers a lower membership plan than a majority of its competitors that will appeal to consumers, according to the note. At the same time, Oscar Health recently set a $120 million cost-savings target that the analyst approved of, read the note. “We think the company’s target of health plan profitability in 2023 and total company profitability in 2024 (measured by adjusted EBITDA) are likely to be feasible given slower growth, pricing for margin / MLR improvement, and a significant focus on administrative costs,” Baxter wrote. The analyst halved his price target to $4 from $8. Even so, the stock has more than 38% upside from its most recent closing price of $2.89. —CNBC’s Michael Bloom contributed to this report.