HCA Holdings (HCA, Buy) shares jumped 8% while company posted interim second quarter results, signifying growth in patient volume and net revenue gain. Same facility admissions grew 1.2 percent and case mix increased at rate of 1.7 percent. A same facility equivalent admission increased by 2.2 percent and same facility revenue per equivalent admission is likely to grow at 5.4 percent.
As per preliminary results, revenues are expected to grow at 9.2% year over year to $9.23 billion (which includes pre-tax income to be $904 million with growth rate of 12.2% year over year). EPS is projected to be $1.07 with 17.6% growth rate.
Initially results seems quite positive to us and after reviewing through report, we reiterate our ‘Buy’ rating and escalate price target to $67 from initial figure of $65. Currently HCA is trading at $62.52, which is otherwise, 14 times of our fiscal year EPA estimate