How Will HCA (HCA) Stock React To This Ratings Initiation?

NEW YORK (TheStreet) -- HCA Holdings Inc. (HCA) was initiated with a "outperform" rating and $85 price target at Leerink Partners on Friday.

The firm said it initiated coverage on the holding company, whose affiliates own and operate hospitals and related healthcare entities, as the company's estimates are above consensus, and HCA is seeing a reduction in bad debt, and an increase in utilization.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates HCA HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HCA HOLDINGS INC (HCA) a BUY. This is driven by multiple strengths, 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 solid stock price performance, increase in net income, revenue growth, good cash flow from operations and growth in earnings per share. 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:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 76.78% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HCA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $423.00 million to $483.00 million.
  • HCA's revenue growth trails the industry average of 20.7%. Since the same quarter one year prior, revenues slightly increased by 9.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 53.56% to $1,250.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 10.50%.
  • HCA HOLDINGS INC has improved earnings per share by 17.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HCA HOLDINGS INC reported lower earnings of $3.36 versus $3.49 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $3.36).
  • You can view the full analysis from the report here: HCA Ratings Report

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