Morgan Stanley Starts HCA Healthcare Inc (HCA) at Equalweight

Morgan Stanley analyst Craig Hettenbach initiates coverage on HCA Healthcare Inc (NYSE: HCA) with a Equalweight rating and a price target of $427.00.

The analyst comments: "We're bullish on HCA's fundamentals and view its bellwether status within the Hospital group as warranted, but take a measured approach on the stock following significant outperformance. The company checks all the boxes—scale, industry leading margins, strong presence in fast growing markets (TX and FL combine for ~50% of revenue) and solid execution on capital allocation. However, after a period of meaningful positive estimate revisions, led by an 8-9% increase in EBITDA estimates for 2024 and 2025 in the last 18 months, the pace of revisions is likely to slow from here. Strong fundamentals should sustain in 2H'24, with a bigger debate on the trajectory in 2025. Our EBITDA estimates are modestly above the Street for the next two quarters and we are essentially in line on revenue and a touch higher on EBITDA for 2025. Our $427 PT is based on a 10X EV/EBITDA multiple on 2025, which is at the high end of the company's historical multiple and in line with the current valuation, reflecting HCA's strong track record and momentum in the business."

For an analyst ratings summary and ratings history on HCA Healthcare Inc click here. For more ratings news on HCA Healthcare Inc click here.

Shares of HCA Healthcare Inc closed at $395.59 yesterday.

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