Brentwood-based hospital chain LifePoint has contracted with a Kansas City marketing software company to help it streamline its collateral and messaging consistency in its markets.
Middle Tennessee's hospital stocks are having their third uniformly solid trading day in a row as investors today have been buoyed by some merger news as they reassess just how big the risks are of a real economic slowdown. Heading into the last minutes of trading, HCA, CHS, LifePoint and Vanguard all are up more than 6 percent, more than triple the S&P 500's gain for the day. Other area health care names such as HealthStream, Brookdale and Healthcare Realty also are outpacing the broader market.
Leerink Swann analyst Jason Gurda has upgraded shares of LifePoint Hospitals (Ticker: LPNT) citing the stock's valuation after a retreat from its May highs. Gurda this week also begun covering shares of Vanguard Health Systems (Ticker: VHS) with an 'outperform' rating and a price target range of $20 to $22. Part of his reasoning: The hospital sector as a whole is undervalued — especially after getting hammered again as part of Thursday's slide.
SEE ALSO: It's unanimous: Buy Vanguard
Middle Tennessee's hospital chains have for years been among the country's most active buyers of facilities. They look set to have many more opportunities going forward, reports Russ Britt at MarketWatch. Cuts in reimbursement rates will force many more facilities onto the auction block.
“I think it’s starting to drain on people,” said Rick Kneipper, chief strategy officer for Anthelio Health Solutions, a Dallas-based health-care consultant. “If you ever did have a sustainable model in the health-care provider world, you really don’t anymore."
Duke LifePoint Healthcare has signed a definitive agreement to buy 80 percent of the 102-bed Maria Parham Medical Center in Henderson, N.C. The joint venture had signed an MOU with the nonprofit hospital early this year and now expects to close its purchase in the next three months. The deal calls for capital improvements of $45 million in the next decade.
...the rest of the hospital management sector gets the sniffles. Following the disappointing Q2 profit report from industry leader HCA, the stocks of its peers are all trading down at least 2 percent this morning. Among the hardest hit are Community Health Systems and its erstwhile buyout target Tenet.
Analysts at New York-based Auriga USA have begun covering local hospital chains Community Health Systems and LifePoint Hospitals with 'hold' ratings. (The firm rates competitor Health Management Associates a 'buy.') Regarding Brentwood-based LifePoint, Auriga says management's push to increase volumes will hampered by the economy and the company's rural orientation. Shares of both LifePoint and CHS are down about 1 percent this morning.
Kemp Dolliver at Avondale Securities is encouraged by the second-quarter increase in volumes at AmSurg. He has inched up his 2011 EPS estimate to $1.66 — which is where the consensus is — but he's not yet willing to hike his rating and price target from the current 'market perform' and $27. The slow recovery, he says, will be a headwind into next year. AmSurg shares (Ticker: AMSG) are up about 1 percent this morning to $26.65.
Analyst Kemp Dolliver at Avondale Partners says there were no surprises in the 2012 doctor, hospital and surgery center payment rate recommendations made late last week by the Centers for Medicare and Medicaid Services. The hospital outpatient rate is set to rise 1.5 percent while doctors are technically in line to be paid almost 30 percent less based on the Sustainable Growth Rate formula, but that cut won't make it to market. "We expect Congress will once again 'fix' Medicare physician payments, but the timing is unclear," Dolliver wrote in a note where he affirmed his 'outperform' ratings on HCA, LifePoint and other hospital chains.
At Barclays Capital, analyst Paul Cheng has lifted his price target on shares of Delek US Holdings to $14 from $12. That's good news in itself, but it's worth noting that Delek (Ticker: DK) is this morning trading above $16 and has more than doubled so far in 2011.