雅虎香港財經 3 Hospital Stocks to Buy With Strong Earnings Estimate Revisions
The U.S. hospital industry has been in fine fettle over the past year. The industry has been witnessing several positive catalysts such as rising admissions, the resumption of elective procedures, cybersecurity and other technological advancements.
The Zacks-defined Medical – Hospital Industry is currently in the top 1% of the Zacks Industry Rank. In the past year, the industry has provided a massive 61.1% return, while its year-to-date return is also impressive at 50.6%. Since it is ranked in the top half of Zacks Ranked Industries, we expect the consulting services industry to outperform the market over the next 3 to 6 months.
At this stage, investment in hospital stocks should be prudent in the near term. We have narrowed our search to three companies — HCA Healthcare Inc. HCA, Tenet Healthcare Corp. THC and Universal Health Services Inc. UHS.
These stocks have strong growth potential for the rest of 2024 and have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hospital Industry Thriving
The return of elective procedures post-pandemic has driven up patient volumes and admissions. According to the U.S. Census Bureau's revised report, the aging U.S. population, particularly the 65+ age group, is expected to fuel demand for hospital services, with this demographic projected to grow from 17.3% in 2022 to 22.8% by 2050.
In order to minimize operating expenses, hospitals are focusing on improving labor productivity, adopting new technologies to optimize costs, and boosting efficiency. Increased revenue per admission will help maintain margins while renegotiating supplier contracts will enhance cost management and operational efficiency.
Hospitals are increasingly leveraging artificial intelligence (AI), automation, and real-time analytics to enhance patient care, streamline workflows and reduce costs. These technologies help hospitals in boosting operational efficiency and patient outcomes while maintaining a competitive edge.
3 Hospital Stocks to Buy
These three hospital stocks have seen strong earnings estimate revisions in the last 60 days.
HCA Healthcare Inc.
HCA Healthcare’s revenues remain on an uptick on the back of growth in admissions and inpatient surgeries, and the resumption of deferred elective procedures is likely to sustain the trend. HCA expects revenues and equivalent admissions to grow 8.9% and 3-4%, year over year in 2024, respectively.
Multiple buyouts aided in increasing patient volumes and added hospitals to the portfolio. HCA is benefiting from its telemedicine business line. HCA’s operating cash flows rose 3.8% year over year in the first half of 2024. HCA resorts to prudent capital deployment via share buybacks and dividend payments.
HCA Shares’ Earnings Estimate Revisions on the Rise
Zacks Rank #2 HCA Healthcare has an expected revenue and earnings growth rate of 8.9% and 18.2%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, next quarter, current year and next year in the last 30 days.
Image Source: Zacks Investment Research
Tenet Healthcare Corp.
Tenet Healthcare’s revenue growth is fueled by increasing patient admissions, emergency room visits, and hospital surgeries. THC’s strategy of acquisitions and alliances aims to expand the scale of its business through inorganic growth.
THC has been undertaking divestitures to eliminate unprofitable businesses and focus on allocating capital to higher return-generating investments. Performances in Ambulatory Care are driving the results. THC has investments in other health care companies and is one of the largest investor-owned health care delivery systems in the United States.
Impressive Earnings Estimate Revisions for THC Stock
Zacks Rank #1 Tenet Healthcare has an expected revenue and earnings growth rate of 1.4% and 53.6%, respectively, for the current year. The Zacks Consensus Estimates for the current quarter, next quarter, as well as the current and next year has improved in the last 60 days.
Image Source: Zacks Investment Research
Universal Health Services Inc.
Universal Health’s Acute Care and Behavioral Health segments have been pivotal in driving top-line growth, fueled by expansions in licensed bed capacity. UHS anticipates positive impacts on its Acute Care unit from Medicaid supplemental programs.
Strategic buyouts have played a significant role in augmenting its growth trajectory by broadening its portfolio of facilities. UHS maintains a robust liquidity position, enabling it to pursue growth initiatives and distribute capital through buybacks and dividends.
UHS Shares Witness Robust Earnings Estimate Revisions
Zacks Rank #1 Universal Health Services has an expected revenue and earnings growth rate of 9.8% and 51%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the last 60 days.
Image Source: Zacks Investment Research
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Universal Health Services, Inc. (UHS) : Free Stock Analysis Report
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