Hospital stocks are seeing a lot of action after the Supreme Court ruled Thursday to uphold subsidies for consumers buying health insurance in states using the federal marketplace.
Avondale Partners analyst Paula Torch reiterated her 'market outperform' rating for HCA Holdings and raised the firm's price target to $103 from $90, saying the Supreme Court ruling "clears the runway for the multiple to expand."
Mizuho analyst Sheryl Skolnick has upgraded the stocks of Community Health Systems from 'neutral' to 'buy' and raised her $52 price target all the way to $83.90. On the flip side, CHS was downgraded by Raymond James John Ransom, who dropped the firm's 'outperform' rating to 'market perform.'
Also happening today:
• Leerink analyst Ana Gupta raised her price target for HCA from $95 to $100. She also raised her target for CHS to $70 from $60 and LifePoint Health from $75 to $85.
• Analysts at Oppenheimer raised their price target on HCA to $82 from $60 and CHS to $102 from $87.
• Jefferies analyst Brian Tanquilut raised his price target for HCA to $108 from $95 and CHS to $79 from $75.
Veteran hospital analyst Gary Lieberman at Wells Fargo expects that the Supreme Court's ruling Thursday safeguarding health insurance exchange subsidies will be the last major challenge to the Affordable Care Act. As a result, he has upgraded shares of locals HCA Holdings and Community Health Systems as well as Tenet Healthcare — even though they soared Thursday — to 'outperform' from 'market perform.' Notably, he left intact his lower rating on LifePoint Hospitals. Overall, Lieberman says the hospital sector should now have solid long-term profit prospects.
HCA Holdings' finance team has saved the company a few dollars by renegotiating two big loans with a group of lenders led by Bank of America. The Nashville-based hospital giant (Ticker: HCA) has replaced a $482 million term loan that would have expired next May and a $717 million facility due next February with a single $1.4 billion credit line that will mature in mid-2020. The new facility also comes with a lower interest rate.
Analyst Sarah James has formally begun covering shares of Nashville's big three hospital operators as well as other prominent health care players. She rates both HCA Holdings and Community Health Systems at 'outperform,' saying investors will benefit from, among other things, the growth of HCA's Parallon support services unit and CHS' potential for margin expansion. James isn't as bullish on the prospects of LifePoint Health, which she has given a 'neutral' rating.
Over at Goldman Sachs, analysts have launched coverage of Amsurg with a 'buy' rating and $81 target. That's 17 percent above where AmSurg (Ticker: AMSG) closed Wednesday trading.
Half of the highest-charging hospitals in the country are owned by Community Health Systems, according to a study published in the Health Affairs journal Monday. Kaiser Health News reports of the 50 hospitals with the highest charges, 49 are for-profit facilities, 20 operate in Florida and half are owned by CHS.
However, the charges referenced in the study are "chargemaster prices," or the sticker price that is later negotiated down by private insurers.
But for uninsured patents asked to pay full charges, insured patients who end up at an out-of-network hospital and patients whose treatment is covered by casualty or workers compensation insurance, these charges can matter a lot.
CHS spokesperson Tomi Galin told Kaiser in a written statement that the company provided more than $3.3 billion in charity care in 2014, and that the charges included in the study "are not relevant measures of what consumers, insurers or the government pay for services."
The highest-charging hospitals were congregated in 13 states, Kaiser said, including Tennessee.
Shares of CHS (Ticker: CYH) fell 2.6 percent to $52.76 Monday. Year to date, they're also down about 2 percent.
Analysts at Goldman Sachs have initiated coverage of LifePoint Health, setting a 'conviction buy' rating for the hospital operator. The investment firm set a price target of $92 for the Nashville company, which closed Friday trading (Ticker: LPNT) up 1.4 percent at $74.44. Year to date, they're up about 3 percent.
Iasis Healthcare has opened a new hospital in Lehi, Utah, about 30 miles south of Salt Lake City.
Mountain Point Medical Center is a 124,000-square-foot hospital equipped with comprehensive care units, including an emergency department, intensive care unit and full lab. A 60,000-square foot integrated medical office houses primary care and multi-speciality physician groups. Nashville-based Earl Swensson Associates served as the architect and interior designer of the building.
“We have been preparing for this day for over two years and are thrilled that we can now provide high-quality healthcare to this growing community,” Carl Whitmer, president and CEO of IASIS Healthcare, said in a release. “We are proud of the skilled and experienced staff at Mountain Point that is committed to providing excellent care and service, and we look forward to serving patients in this community for many years to come. IASIS remains focused, along with our medical staffs, on continuing to improve access to high-quality, cost-effective healthcare for employers and residents of Utah."
The Franklin company announced plans in February to raise $100 million by going public. Iasis operates 17 hospitals and 132 outpatient facilities as well as a managed care platform.
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