JPMorgan & Chase analyst Justin Lake says local hospital heavyweights HCA Holdings and Community Health Systems are among the companies best positioned to benefit from the implementation of national health care reform. He has boosted his price target for HCA — which closed Monday trading at $42.16 — to $50 from $43 and now sees CHS (Ticker: CYH) climbing to $56 (up from $52) from its current $40ish level. In both cases, his target is higher than the Street's consensus.
Shares of Dollar General are getting a nice boost to start the week from Matthew Boss at JPMorgan, who has upgraded the stock to 'overweight' from 'neutral.' Boss' new price target is $64, more than 20 percent above where Dollar General (Ticker: DG) closed Friday trading. He says the discount retailer can continue to post double-digit EPS growth in the coming years, something that has been the subject of a little bit of debate lately.
JPMorgan analyst Kevin Milota has reversed course on Ryman Hospitality Properties just seven weeks after upgrading the hotel real estate investment trust to 'overweight.' A day after Ryman reported a disappointing Q2, Milota lowered the company's shares (Ticker: RHP) back to 'neutral.' There's no info on what his new price target is; the old one was $42 and Ryman closed Wednesday trading at $34.99.
Kevin Campbell at Avondale Partners has hiked his price target for shares of Acadia Healthcare to $41 from $35 after the company's Q2 beat. Campbell, who also lifted his EPS estimates ever so slightly, thinks the company can keep growing its same-facility revenues at a double-digit pace in the near future. Helping the cause are "the overall improvement in state budgets, the proposed Medicare rate increase (2.3% 10/1/13), and continued solid pricing from commercial payers," which should add about 2 percent to Acadia's prices through the end of next year. Acadia shares (Ticker: ACHC) were up more than 2 percent to about $37.80 mid-day Thursday, lifting the company's market cap close to $2 billion.
Three more analysts following Tractor Supply — all of them rating the company a 'buy — have updated their price targets for the Brentwood-based farm and ranch retailer. Christopher Horvers at JPMorgan now sees the stock climbing to $134 from $111, Scott Ciccarelli at RBC Capital now has a target of $128 to $118 and David Magee at SunTrust thinks the shares will climb to $140 versus his previous target of $136. Shares of Tractor Supply (Ticker: TSCO) were up almost 1 percent around lunch to about $122.
Kevin Milota at JPMorgan sees opportunity in the recent pullback in Ryman Hospitality Properties shares. He has raised his rating on Ryman to 'overweight' from 'hold' and lifted his price target to $42 from $40. Ryman shares (Ticker: RHP) are up slightly in Monday trading and have given up about 14 percent in the past month.
We believe the transition of the sales responsibility from the property level to the regional level led to reduced conversion activity, which fell short of Ryman's previous forecast. With that said, group bookings for 2014 and beyond remain strong, and we do not believe the softness in short-term group is indicative of a monumental slowdown in longer-dated group-booking activity.
JPMorgan Chase officials say they will soon spin out One Equity Partners, the private-equity firm that last year bought M*Modal for $1.1 billion. The firm, which manages $4.5 billion worth of investments, will continue to manage its current portfolio and sell off its holdings over time.
Don't look for the analysts at JPMorgan to give the slumping shares of Vanguard Health Systems a boost: The firm has lowered its price target for the Nashville-based hospital operator to $13 from $15. Vanguard (Ticker: VHS) has slid from more than $17 to about $12 in the past two months.
So if you're feeling contrarian, now might be a time to get short hospital companies.
Two more analysts have this week joined the Wall Street chorus saying investors should buy shares of HCA Holdings, Community Health Systems and other players on the expectation that they will be big beneficiaries when millions of consumers come into the health insurance system next year. Justin Lake at JPMorgan on Monday hiked his CHS price target to $52 from $38, citing the reform boost and other operating metrics. Then this morning, BMO Capital's Jennifer Lynch raised her target for CHS to $49 from $35 — lifting its rating to 'market perform' from 'underperform' — for HCA to $42 from $39 and for LifePoint Hospitals to $50 from $41.
There's not much upside from where the stocks are now trading to those targets, but given the near-universal bullishness, don't be surprised if they get bumped up again following Q1 earnings reports. The question is if the stocks — they've all climbed 28 percent or more so far in 2013 — have much more in them.