Deutsche Bank has reiterated its Buy rating for HCA Healthcare Inc (NYSE: NYSE:HCA) while maintaining the stock's price target at $441.00.
The firm's analysis highlighted that HCA's same-store hospital revenues showed an 8.1% increase in August.
Despite this being lower than the 17% revenue growth seen in July, the apparent slowdown is attributed to the shift in business days from the previous year.
The July increase benefited from weekends in 2023 falling on more lucrative weekdays in 2024. Conversely, August saw a slight reversal, with weekdays from the previous year turning into less advantageous weekend days.
The bank's dataset, which includes approximately 200 hospitals and $4.8 billion in monthly revenues, indicates that second-quarter revenues are tracking at 12.7%, surpassing Deutsche Bank's initial estimate of 7.6%. The analysis suggests that the calendar has been slightly favorable overall for the quarter.
Looking ahead, September's calendar is expected to be favorable once again. The switch from a Friday and Saturday in 2023 to a Sunday and Monday in 2024 could potentially lead to another quarter of significant revenue growth for HCA Healthcare. However, Deutsche Bank cautions investors that some of this outperformance is due to the impact of calendar days.
In other recent news, HCA Healthcare has made notable strides in its financial performance, with a prominent highlight being a 28% increase in adjusted earnings per share to $5.50 in the second quarter of 2024.
This strong performance led to revised price targets from several firms, including Morgan Stanley, RBC Capital Markets, and Truist Securities. The company also completed a public offering of $3 billion in senior notes, which are intended for general corporate purposes.
These developments have led to a significant upgrade in HCA Healthcare's full-year 2024 guidance, now forecasting robust volume growth between 4-6%. The revised full-year revenue projection ranges between $69.75 billion and $71.75 billion.
Morgan Stanley initiated coverage on HCA Healthcare with an Equalweight rating and set a price target of $427.00. The firm acknowledged HCA's strengths but also highlighted the potential for a slowdown in growth relative to the recent past. Meanwhile, RBC Capital Markets adjusted its outlook on HCA Holdings, increasing the price target to $405, and Truist Securities increased its stock price target for HCA Holdings to $430.
InvestingPro Insights
As Deutsche Bank maintains a positive outlook on HCA Healthcare Inc (NYSE:HCA), highlighting the company's revenue growth, it's beneficial to consider additional insights from InvestingPro. HCA has demonstrated a commitment to enhancing shareholder value, as evidenced by its management's aggressive share buyback strategy. Alongside this, HCA has consistently raised its dividend for three consecutive years, signaling confidence in its financial health and future prospects.
InvestingPro data reveals that HCA currently has a market capitalization of $104.27 billion, with a P/E ratio of 18.74, reflecting a premium valuation relative to near-term earnings growth. Despite this, the company's revenue growth over the last twelve months stands at 10.38%, indicating robust business performance. Moreover, HCA's stock has yielded a high return over the last year, with a 64.35% increase and is trading near its 52-week high, at 98.95% of this peak value.
For investors seeking deeper analysis, there are additional InvestingPro Tips available, including insights on stock price volatility, industry positioning, and profitability predictions. To explore these further, visit InvestingPro's tailored page for HCA Healthcare: https://www.investing.com/pro/HCA.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.