HCA - Embedded Expectations Analysis - 2021 11 15
HCA Healthcare, Inc. (HCA) currently trades near historical, but below corporate averages relative to Uniform earnings, with a 15.5x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to sustain current levels of 12%, accompanied by 3% Uniform asset growth.
Meanwhile, analysts expect Uniform ROA to expand to 15% by 2022, accompanied by 2% Uniform asset growth.
Given the firm's best in class operations and market consolidation opportunities, there is potential for stronger-than-priced-in performance.
If the company can capitalize on these tailwinds and initiatives, it could drive 14% Uniform ROA and 5% Uniform asset growth going forward, which would imply a stock price closer to $365, representing approximately 45% equity upside.
Moreover, the firm's most recent earnings call suggests management is excited about job growth and confident about market share gains.
HCA Healthcare is a holding company. Through its subsidiaries, partnerships and joint ventures, the company owns and operates hospitals and related health care entities. Most of the company's general, acute care hospitals provide medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic services and emergency services. The general, acute care hospitals also provide outpatient services such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology and physical therapy. The company's psychiatric hospitals provide therapeutic programs including child, adolescent and adult psychiatric care, adolescent and adult alcohol and drug abuse treatment and counseling.
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