Barclays Maintains an 'Overweight' on Health Management (HMA); Sept Qtr Review

Barclays maintains an 'Overweight' on Health Management (NYSE: HMA) price target of $11.00.

Barclays analyst says, "HMA reported September quarter earnings of $0.19, which was $0.02 ahead of consensus and in line with our estimate of $0.19. Revenue was also in line with the consensus estimate and EBITDA margins were stronger than expected, with HMA exhibiting strong cost control during the quarter, especially around Salaries & Benefits and supply costs. In addition, bad debt expense was in line with our estimate, and the total cost of uncompensated care only increased 20 basis points sequentially. More important, HMA continues to report same-store revenue growth at 4%-5%."

"With the quarter, we are maintaining our 2011 EPS estimate of $0.80 and increasing our 2012 EPS estimate to $0.91 (up from $0.90). We believe HMA can report closer to the high end of its 2011 EPS range and highlight that potential sources of upside to our 2012 EPS estimate of $0.91 include: a) better-than-expected margin improvement at recent acquisitions; b) HMA completing additional acquisitions; and, c) HITECH."

For more ratings news on Health Management click here and for the rating history of Health Management click here.

Shares of Health Management closed at $8.82 yesterday.

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