Local RBC Capital health care analyst Frank Morgan has hiked his price target for shares of LifePoint Hospitals waaaaaaay up to $89 from $63 following the company's blowout second-quarter earnings report. Morgan says health care reform is driving most of the good numbers but he likes the improved visibility into the company's operations and continues to rate the stock an 'outperform.' LifePoint shares (Ticker: LPNT) have climbed to $74 from $65 since its report but Morgan isn't the only one who sees them rising further. Over at UBS Securities, A.J. Rice has raised his target to $80 from $73.
UBS Securities analyst A.J. Rice says HCA's second-quarter profits won't look great at first blush — comparisons with year-ago numbers will be tough for a number of reasons — but adds that he's heartened by executives' positive tone earlier this quarter. Rice has lifted his price target for the stock of Nashville's largest company (Ticker: HCA) to $67 from $58 and is optimistic hospital operators will say they're benefiting nicely from health insurance reform. HCA shares fell almost 2 percent Tuesday to $54.52 but are up about 15 percent year to date.
There are far fewer reasons to be optimistic for Louisiana-Pacific investors these days, judging by the moves of analysts at Dundee Securities and RBC Capital Markets. At the first firm, Steve Atkinson on Tuesday launched coverage of the construction materials manufacturer with a 'sell' rating and $13 price target, which is 14 percent below where LP shares (Ticker: LPX) began trading yesterday. Atkinson's main reason is a price war that will hurt margins and has him projecting a Q2 loss that stands in sharp contrast to the consensus. At RBC, Paul Quinn has cut his rating to 'sector perform' from 'outperform' and sees LP shares climbing back to only $16 in the coming quarters.
Hospital stocks are finishing the week on a high note thanks to Medicaid expansion chatter in Virginia and Pennsylvania, says UBS analyst A.J. Rice. The firm says Community Health Systems has more than 11 percent exposure in Pennsylvania and LifePoint Hospitals gets nearly 13 percent of its revenues in Virginia.
Virginia Gov. Terry McAuliffe has made clear that expanding Medicaid is a top priority, but state Republicans are pushing back, MSNBC reports.
The governor insists he won't approve a budget without Medicaid expansion; Republicans insist they won't approve a budget with Medicaid expansion. It's pushed McAuliffe to try to get creative, though the details of his plan remain elusive.
Pennsylvania's shot at expansion seems a bit more likely, with three Republican House members joining with Democrats this week to vote in favor of expanding Medicaid. However, Gov. Tom Corbett does not support expansion, the Pittsburgh Post-Gazette reports, and has submitted a "Healthy PA" plan to the federal government in its stead.
Shares of CHS (Ticker: CYH) are up 8 percent this week to $45.12. Shares of LifePoint (Ticker: LPNT) are up 5 percent this week to $64.16.
UBS analyst A.J. Rice has reiterated his 'buy' rating on shares of HCA Holdings and lifted his price target to $50 from $48. Rice says Nashville's biggest company is well positioned to put up strong numbers in what remains of this year, at least "relative to current expectations." In an industry struggling to boost volumes, Rice sees HCA growing between 1 percent and 2 percent. HCA shares (Ticker: HCA) are up about 3 percent on the news, peaking at a record high of $44.11 in the morning before settling in just below $44. And according to OptionMonster.com, traders see a good bit more upside.
Rice's colleague Michael Lasser likes the look of the recently split shares of Tractor Supply and has hiked his price target for the stock from $67 to $75, the highest on the Street. Investors, who had pushed the shares up 10 percent in September, are buying in and pushed Tractor Supply (Ticker: TSCO) up to a record $68.89 in morning trading before retreating a bit after lunch. Tractor Supply is up more than 50 percent so far in 2013.
The news late last week that Community Health Systems will miss analysts' Q2 expectations and has received a second subpoena from government investigators took the company's shares down a notch or two. Several analysts and bankers have told Reuters it also may have seriously delayed CHS' efforts to buy rival Health Management Associates. And with CHS having been seen as the frontrunner for Florida-based HMA, that could open the door for other bidders.
Separately on Friday, UBS analyst A.J. Rice added himself to the camp of analysts saying the Q2 warning and subpoena news isn't a huge deal. He reiterated his 'buy' recommendation on the company and merely trimmed his price target to $54 to $58. CHS shares (Ticker: CYH) have started the week down 1 percent and are testing their medium-term lows from late April and late May.
Officials at the Centers for Medicare and Medicaid Services said late Monday they plan to increase reimbursements for outpatient department services by 1.8 percent in fiscal 2014. Analyst A.J. Rice told Reuters the hike is in line with expectations.
Analyst Kevin Campbell at Avondale Partners says a number of factors are aligning in a positive way for LifePoint Hospitals, which reported its first-quarter earnings last week. Between cost controls, M&A opportunities, IT incentive payments and a decent outlook for the pricing of health insurance exchanges, Campbell reiterated his 'market outperform' rating and raised his price target to $56 from $54.
Credit Suisse analyst Ralph Giacobbe has bumped his target to $48 for similar reasons. And Giacobbe peers Kevin Fishbeck at Bank of America Merrill Lynch and A.J. Rice at UBS have both bumped LifePoint to 'buy' from 'neutral.'
Shares of LifePoint (Ticker: LPNT) were up more than 6 percent in mid-day trading to about $48.30.
A fistful of analysts tracking Community Health Systems came out firing on Monday, raising their target prices for the company's stock following its fourth-quarter earnings report late last week. Here's a rundown:
• Joe France at Cantor Fitzgerald: Reiterate 'hold,' lift target from $28 to $35
• Josh Raskin at Barclays: Reiterate 'equalweight,' lift target from $36 to $48
• A.J. Rice at UBS: Reiterate 'buy,' lift target from $44 to $52
• Frank Morgan at RBC Capital Markets: Reiterate 'outperform,' tweak target from $45 to $46
• Ann Hynes at Mizuho: Reiterate 'neutral,' lift target from $39 to $41
The upside most of these researchers saw early Monday is now even bigger: CHS (Ticker: CYH) rose early but gave way along with most of the market and closed trading at $40.08, down more than 4 percent on the day.
It's time to back away from buying Delek US Holdings, says Roger Read at Wells Fargo Securities. He has trimmed his recommendation for shares of the Brentwood-based oil refiner and marketer to 'market perform' from 'outperform.' Nevertheless, he has raised his price target range to $39 to $41 from $35 to $37 and says the refining sector should continue to do well. Read's move took its tool Wednesday, though: The stock (Ticker: DK) fell almost 6 percent, trimming its year-to-date gains to "only" 45 percent.
Also taking a hit Wednesday was LifePoint Hospitals, which slipped more than 2 percent — likely because of the broader market malaise — even though UBS analyst A.J. Rice raised his target to $48 from $46. Rice reiterated his 'neutral' rating on the shares of the Brentwood-based hospital chain (Ticker: LPNT).
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