On Monday, Mizuho maintained its Outperform rating on shares of HCA Healthcare Inc (NYSE:HCA) with a steady price target of $425.00. The firm's stance comes after HCA Healthcare reported its third-quarter results, which reflected strong performance despite setbacks from the recent Florida hurricanes. The earnings per share (EPS) for the quarter outperformed consensus estimates by 1.8% when adjusting for the hurricane effects, marking a 29% year-over-year increase.
HCA Healthcare anticipates landing in the lower half of its previously upgraded second-quarter guidance due to the hurricanes' impact, which is also expected to negatively affect the fourth-quarter EPS by approximately $0.75 at the midpoint.
Nevertheless, the company has provided an initial forecast for 2025, projecting adjusted EBITDA growth to be at or slightly above the upper end of its long-term growth range of 4-6%. This outlook, adjusted for the hurricanes' negative effects, is estimated to be roughly 1% higher than the current consensus estimates.
The analyst noted that the pre-market sell-off of HCA Healthcare's stock was an overreaction. Despite the challenges posed by the hurricanes, the company has demonstrated resilience in its financial performance and maintains a positive growth outlook for the coming year. The reaffirmed price target and rating reflect confidence in HCA Healthcare's ongoing business strength and future prospects.
In other recent news, HCA Healthcare has exhibited robust financial performance despite significant challenges posed by Hurricanes Helene and Milton. The company reported a 25% increase in adjusted diluted earnings per share to $4.90 and a 7.1% revenue growth from the same facilities. However, the hurricanes led to an estimated $50 million revenue loss for Q3, with an additional projected loss of $200-$300 million for Q4.
Analyst firm Cantor Fitzgerald has maintained a positive stance on HCA Healthcare, raising the price target to $405 from the previous target of $392. This adjustment reflects an optimistic view of HCA Healthcare's future financial performance, with a strong revenue and admission outlook expected to remain robust.
HCA Healthcare also revealed plans to add 600 inpatient beds and 100 outpatient facilities by year-end 2024. The company anticipates volume growth between 3% to 4% for 2025, with formal guidance to be provided in January. These are recent developments that reflect the company's ability to navigate through natural disasters with a strategic approach while maintaining a strong financial position.
InvestingPro Insights
Adding to Mizuho's positive outlook on HCA Healthcare, recent InvestingPro data provides further context to the company's financial performance and market position. Despite the recent hurricanes' impact, HCA's revenue growth remains strong, with a 10.23% increase over the last twelve months as of Q3 2024, reaching $69.62 billion. This aligns with the company's resilient performance noted in the article.
InvestingPro Tips highlight that HCA has been aggressively buying back shares, which often signals management's confidence in the company's value. Additionally, HCA has raised its dividend for 4 consecutive years, demonstrating a commitment to shareholder returns that complements its growth strategy.
The company's P/E ratio of 16.3 suggests a reasonable valuation, especially considering the strong revenue growth and positive outlook for 2025 mentioned in the article. This valuation metric, combined with HCA's status as a prominent player in the Healthcare Providers & Services industry, supports Mizuho's Outperform rating.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for HCA Healthcare, providing deeper insights into the company's financial health and market position.
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