NEW YORK (TheStreet) -- Shares of DaVita HealthCare Partners  (DVA - Get Report) are down -3.71% to $71.11 in heavy trading volume following Raymond James (RJF - Get Report) downgrade of the stock to "market perform" from "outperform," citing near-term uncertainty relating to executive changes at its HealthCare Partners division.

DaVita, a leading provider of kidney care and health care services, announced on Friday that HealthCare Partners president and CEO Dr. Craig Samitt is stepping down from HCP effective August 1.

Kent Thiry, co-chairman and CEO of DaVita HealthCare Partners, will take over the role of CEO of HCP. 

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"We remain constructive -- longer term -- about the company's business model and strong free cash flow generation; however, we do not believe that these longer-term strengths will trump the near-term uncertainty," Raymond James analysts said.

TheStreet Ratings team rates DAVITA HEALTHCARE PARTNERS as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate DAVITA HEALTHCARE PARTNERS (DVA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."

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

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • DAVITA HEALTHCARE PARTNERS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DAVITA HEALTHCARE PARTNERS increased its bottom line by earning $2.90 versus $2.73 in the prior year. This year, the market expects an improvement in earnings ($3.63 versus $2.90).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 507.6% when compared to the same quarter one year prior, rising from $30.16 million to $183.29 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.7%. Since the same quarter one year prior, revenues slightly increased by 7.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Health Care Providers & Services industry and the overall market, DAVITA HEALTHCARE PARTNERS's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: DVA Ratings Report

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