NEW YORK (TheStreet) -- Shares of HealthSouth Corp (HLS)  may trade higher in Thursday's session after the health care services provider had its rating increased by analysts at JMP Securities this morning.

The firm upgraded the company to "market outperform" from "market perform" with a $54 price target, saying it has an upbeat view of the company's growth prospects.

"We believe HLS is poised for accelerated top-line and adjusted EBITDA growth as it marks the anniversary of non-recurring expenses, integrates the recently announced Reliant acquisition, and allocates growth capital to its Home Health & Hospice division," the firm wrote in a note this morning.

JMP added that it likes the company for its sector leadership, management team execution, and strong balance sheet.

Shares closed at $46.45 yesterday.

Birmingham, Ala.-based HealthSouth is an owner and operator of inpatient rehabilitation hospitals.

The company's inpatient rehabilitation hospitals provide rehabilitative care across an array of diagnoses, including physical and cognitive disabilities, injuries due to medical conditions, and debilitating neurological conditions. 

Separately, TheStreet Ratings team rates HEALTHSOUTH CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HEALTHSOUTH CORP (HLS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.9%. Since the same quarter one year prior, revenues rose by 24.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, HLS's share price has jumped by 31.28%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HLS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • HEALTHSOUTH CORP's earnings per share declined by 8.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HEALTHSOUTH CORP reported lower earnings of $2.23 versus $2.42 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $2.23).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, HEALTHSOUTH CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income has decreased by 9.0% when compared to the same quarter one year ago, dropping from $46.70 million to $42.50 million.
  • You can view the full analysis from the report here: HLS Ratings Report