NEW YORK (TheStreet) -- Kindred Healthcare (KND) has been upgraded to "outperform" with a $21 price target, RBC Capital said Monday. The firm said the company should benefit from recent long-term acute care (LTAC) legislation.
Separately, TheStreet Ratings team rates KINDRED HEALTHCARE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate KINDRED HEALTHCARE INC (KND) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Providers & Services industry average. The net income increased by 18.8% when compared to the same quarter one year prior, going from -$81.63 million to -$66.30 million.
- Powered by its strong earnings growth of 35.80% and other important driving factors, this stock has surged by 136.95% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- KINDRED HEALTHCARE INC has improved earnings per share by 35.8% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, KINDRED HEALTHCARE INC's EPS of -$0.94 remained unchanged from the prior years' EPS of -$0.94. This year, the market expects an improvement in earnings ($1.15 versus -$0.94).
- The gross profit margin for KINDRED HEALTHCARE INC is currently extremely low, coming in at 5.97%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.41% trails that of the industry average.
- Net operating cash flow has significantly decreased to $10.20 million or 85.73% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: KND Ratings Report