UPDATE: BMO Capital Markets Reiterates on HCA on Model Update Following Earnings Call

In a report published Wednesday, BMO Capital Markets analyst Jennifer Lynch reiterated a Market Perform rating on HCA Holdings (NYSE: HCA), and raised the price target from $43.00 to $44.00.

In the report, BMO Capital Markets noted, “We are updating our model following earnings as well as a quick visit to the company. Results in the quarter were solid and consistent with the preview issued midway through October. Case mix and acuity created favorable revenue results, and bad debt expense was lower than we expected. The sequential decline in doubtful account dollars was unique among competitors. The company's operational agility contributed to operating cost management. HCA was able to adjust certain spending to partially offset the anemic patient volumes experienced system wide. As HCA makes its way through exchange contracting, nearly all (97%) of the company facilities have bronze plans agreements. Roughly half of HCA's hospitals have signed contracts with the lowest or second-lowest silver plans as well. While we maintain that much of the hospital business will not change in 2014, access to public exchange plan volume will help HCA harness the new market opportunity. We continue to look for small deals HCA could use to build its portfolio (and scale), complementing the reform dynamic next year. Valuation and investor expectations keep us cautious in the near term while the problematic public exchange introductions are addressed.”

HCA Holdings closed on Tuesday at $45.44.