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On Monday, Mizuho (NYSE:MFG) Securities reiterated its Outperform rating on HCA Healthcare Inc (NYSE:HCA), an $83 billion market cap healthcare provider, with a steady price target of $425.00. The affirmation of the rating aligns with the broader Wall Street sentiment, as reflected in the strong Buy consensus rating of 1.8 according to InvestingPro. The company's stock declined by approximately 3% following its recent earnings report, which saw an adjusted EBITDA of $13.86 billion miss expectations by roughly 6% when direct provider payments (DPPs) for the fourth quarter of 2024 were excluded.
Despite the shortfall, Mizuho analysts believe the market reaction is exaggerated, pointing out the unpredictability in forecasting the timing of DPPs. Their confidence appears well-founded, as InvestingPro data shows HCA maintains a "GREAT" financial health score of 3.24, supported by strong revenue growth of 8.67% over the last twelve months. They underscored that demand for HCA's services remains robust, as indicated by a capacity utilization of 71.1% during the quarter, an improvement from 69.9% in the last quarter of the previous year.
The analysts have not only maintained their price target and adjusted EBITDA estimates for 2025 and 2026 but have also increased their adjusted earnings per share (EPS) estimates for the same period. This revision stems from anticipated higher share repurchase activities than previously expected. Additionally, Mizuho has introduced its adjusted EPS estimates for the year 2027.
HCA Healthcare is expected to continue generating revenue and EBITDA growth in 2025, driven by sustained solid demand, favorable patient acuity, stable cost trends, and a positive payer mix. These factors contribute to Mizuho's continued confidence in the healthcare provider's performance prospects.
In other recent news, HCA Healthcare's fourth-quarter 2024 financial report showed a modest outperformance in revenue and EBITDA, along with effective labor management. Analysts from TD Cowen, RBC Capital Markets, Cantor Fitzgerald, Leerink Partners, and KeyBanc Capital Markets have all recently revised their price targets for the healthcare provider. TD Cowen maintained its Buy rating but reduced its target from $440 to $377, citing HCA's same-store revenue growth of 6.1% and a 2.8% year-over-year increase in same-store inpatient surgical cases.
RBC Capital Markets reduced their target to $384, keeping an Outperform rating, and emphasized the company's strong 8.7% revenue growth. Cantor Fitzgerald maintained an Overweight rating on HCA shares, setting a price target of $405, while acknowledging potential challenges for the company in 2025. Leerink Partners adjusted their price target on HCA shares to $404, maintaining an Outperform rating, and highlighted the company's strong demand trends and effective cost control measures.
KeyBanc Capital Markets reiterated an Overweight rating on HCA with a $370 price target, commending the company's fourth-quarter performance marked by robust volume growth. These recent developments underscore the evolving landscape for HCA Healthcare as it navigates the post-pandemic landscape and the ongoing demands of healthcare management.
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