Barclays Maintains an 'Overweight' on HCA Holdings (HCA); Thoughts on Barron's Article on HCA's Accounting Policies
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Price: $404.68 -1.71%
Rating Summary:
23 Buy, 11 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
23 Buy, 11 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Overweight' on HCA Holdings (NYSE: HCA) price target of $30.00.
Barclays analyst, Adam Feinstein, says, "Over the weekend, Barron's published an article which was critical of HCA's accounting for amortization expense, resulting from the company's 2006 LBO and 2010 recapitalization (Where Did the $15.8 Billion Go?, October 1, 2011). In a nutshell, we suggest that the article does not focus on a relevant issue and is misleading in suggesting that HCA has overstated its earnings. At the same time, we believe that the issue addressed in the article would have no impact on cash flow from operations. As a result, we would look to take advantage on any disruption in the share price resulting from this article."
'Barclays Capital Key Takeaways: 1) We suggest that the article does not focus on a relevant issue and is misleading in suggesting that HCA has overstated its earnings; 2) The issue addressed in the article would have no impact on cash flow from operations, in our view; and 3) If the LBO had been treated as an acquisition rather than a recap (as the author suggested), a significant portion of the amount in question would been allocated to goodwill, which would not need to be amortized (under SFAS 142)."
For more ratings news on HCA Holdings click here and for the rating history of HCA Holdings click here.
Shares of HCA Holdings closed at $20.16 yesterday.
Barclays analyst, Adam Feinstein, says, "Over the weekend, Barron's published an article which was critical of HCA's accounting for amortization expense, resulting from the company's 2006 LBO and 2010 recapitalization (Where Did the $15.8 Billion Go?, October 1, 2011). In a nutshell, we suggest that the article does not focus on a relevant issue and is misleading in suggesting that HCA has overstated its earnings. At the same time, we believe that the issue addressed in the article would have no impact on cash flow from operations. As a result, we would look to take advantage on any disruption in the share price resulting from this article."
'Barclays Capital Key Takeaways: 1) We suggest that the article does not focus on a relevant issue and is misleading in suggesting that HCA has overstated its earnings; 2) The issue addressed in the article would have no impact on cash flow from operations, in our view; and 3) If the LBO had been treated as an acquisition rather than a recap (as the author suggested), a significant portion of the amount in question would been allocated to goodwill, which would not need to be amortized (under SFAS 142)."
For more ratings news on HCA Holdings click here and for the rating history of HCA Holdings click here.
Shares of HCA Holdings closed at $20.16 yesterday.
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