HCA (HCA) Shows Positive EBITDA Surprise and Improving Margins - Goldman Sachs
Goldman Sachs analyst Jamie Perse weighed in on HCA Holdings (NYSE: HCA) following this morning's results, which showed a EBTIDA beat and improving margins.
The analyst commented, "Major concerns coming into the print did not materialize. Volumes on adjusted admissions were slightly better than modeled, driven by outpatient, with inpatient admissions slightly below estimates, but overall, better than feared. The bigger takeaway was EBITDA upside (by 8.5%) and we think investors were largely expecting a miss. Salaries and benefits cost was the major driver of the positive EBITDA surprise and we expect commentary on the call to confirm improving contract labor expense dynamics. A solid margin of 20.5%, with limited COVID contribution and some pressures on volumes and costs still in-play in 2Q, was very encouraging. We had initially been cautious into the print (expecting a miss and trimming of the top end of guide) but investor conversations suggested sentiment was too negatively loopsided and suggested last week that a sizeable guide down was unlikely and risk reward, more balanced. While guidance was not mentioned in the press-release, we now expect guidance to be reiterated on the call. We are Buy-Rated."
The firm has a Buy rating and $233.00 price target on HCA.
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Shares of HCA Holdings closed at $181.31 yesterday.