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On Monday, TD Cowen maintained a Hold rating on DaVita (NYSE:DVA) shares but reduced the price target from $165.00 to $157.00. The adjustment follows the company’s first-quarter results for the year 2025, which fell short of adjusted EBIT expectations by 2-3% across various sources. The $10.98 billion market cap healthcare provider, currently trading at $145.41, has maintained strong financial health with an overall score of "GREAT" according to InvestingPro metrics. Analysts cited increased flu cases and weather-related impacts as contributing factors to the underperformance.
DaVita reported that its full-year 2025 volume expectations have been revised downward by 50 basis points due to a combination of flu-related census declines, missed treatments, and lost admissions resulting from a cyber incident. This aligns with InvestingPro data showing two analysts recently revising their earnings expectations downward. Despite these setbacks, the company has reiterated its full-year guidance for EBIT, EPS, and free cash flow, supported by its impressive 16% free cash flow yield.
The new price target of $157 is based on an 8.0x multiple of the projected 2026 enterprise value to EBITDA excluding non-controlling interest (EV/EBITDA-NCI). This valuation reflects a more cautious outlook on the company’s financial performance in light of recent challenges.
DaVita’s recent earnings report and subsequent price target revision reflect the impact of external factors on its operations. The company’s reaffirmation of its financial guidance for the year suggests a level of confidence in its ability to manage these headwinds moving forward.
In other recent news, DaVita HealthCare Partners Inc. reported its first-quarter earnings for 2025, surpassing analysts’ expectations with an adjusted earnings per share (EPS) of $2.00, compared to a forecast of $1.96. The company also reported revenue of $3.22 billion, slightly above the projected $3.20 billion. Despite these positive results, DaVita’s stock experienced a slight decline in aftermarket trading. The company maintained its full-year guidance for adjusted operating income and EPS, despite facing operational challenges such as a cybersecurity incident and a severe flu season. DaVita’s management highlighted resilience in its operations, with strong international performance, particularly in Latin America. The company repurchased $680 million in stock, signaling a commitment to shareholder value. Additionally, DaVita anticipates increased debt expenses of approximately $145 million per quarter for the remainder of the year.
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