HCA Healthcare Reports Strong Third Quarter Results; Street Says Buy

Shares of healthcare facilities operator HCA Healthcare, Inc. (HCA) declined 2.7% to close at $253.11 on Friday even though the company reported better-than-expected results for the third quarter ended September 30, 2021.

Quarterly revenues stood at $15.27 billion, up 14.8% from the previous year’s figure of $13.31 billion. Moreover, the figure topped the consensus estimate of $14.43 billion.

The company reported quarterly earnings of $7 per share and surpassed the consensus estimate of $4 per share. HCA had reported earnings of $1.95 per share last year.

In other operating metrics, adjusted EBITDA of $3.22 billion rose 57% year-over-year. Although, same facility inpatient surgeries declined 4.9%, same facility admissions, equivalent admissions, emergency room visits, outpatient surgeries and revenue per equivalent admission rose 6.8%, 9.3%, 31.2%, 6.4% and 5.2%, respectively, year-over-year.

Notably, the company also provided guidance for 2021. For 2021, HCA expects to post EPS between $17.20 per share and $17.80 per share, as compared to the consensus estimate of $16.93 per share. Meanwhile, the company expects to report revenue in the range of $58.7 billion to $59.3 billion, as compared to the consensus estimate of $57.62 billion.

The CEO of HCA Healthcare, Sam Hazen, said, “During the third quarter we experienced the most intense surge yet of the pandemic, and our colleagues and physicians delivered record levels of patient care to meet the demand caused by the Delta variant. Once again, the disciplined operating culture and strong execution by our teams were on display. I want to thank them for their tremendous work and dedication to serving others.” (See HCA Healthcare stock chart on TipRanks)

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Last month, Leerink Partners analyst Jim Kelly initiated coverage on the stock with a Buy rating. The analyst’s price target of $320 implies upside potential of 26.4% from current levels.

Consensus among analysts is a Strong Buy based on 5 Buys and 1 Hold. The average HCA Healthcare price target of $288.40 implies upside potential of 13.9% from current levels. Shares have gained about 86.9% over the past year.