Buckingham Research Maintains an 'Accumulate' on LifePoint Hospitals (LPNT); Raises Price Target

May 13, 2009 10:49 AM EDT

Buckingham Research maintains an Accumulate rating on LifePoint Hospitals (Nasdaq: LPNT), raises price target from $32 to $34.

Buckingham analyst says, "We are raising the valuation multiples for stocks in the hospital group slightly, to 6.5x 12-month EBITDA from 6.0x. Both of these multiples are in the low end of the historical range for our hospital universe. This increase reflects several factors. First, despite weak Q1 economic conditions and patient volume, the hospital companies outperformed not only estimates but in most cases year-earlier results. They accomplished this almost entirely through cost reduction, much of which we believe can continue for a number of quarters. In addition, they had virtually no benefit from incremental government assistance programs. Despite heightened expectations for a federal healthcare reform plan to be set forth in the near future, hospital companies’ assumptions about addition government aid include only a relatively small sum that was approved for the SCHIP program in Q1; we have assumed the same."

To see more analyst ratings on LPNT Click Here.

LifePoint Hospitals Inc., through its subsidiaries, owns and operates general acute care hospitals in non-urban communities in the United States.

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