Wed, Mar. 4, 12:11 PM
- Hospitals rally on comments from Supreme Court Justice Anthony Kennedy, often a swing vote in important cases. He says there is a powerful point to the Obama administration's argument that the Affordable Care Act would fall apart if the subsidies were ruled invalid.
- The Court is currently hearing arguments in the case King v. Burwell, which challenges federal subsidies in states that did not create their own health insurance exchanges. Its final decision will not be announced until June, though.
- Hospitals and health insurers have the most at stake. They have benefited greatly since the law was signed in 2010. To date, 11.4M Americans have signed up for coverage in 2015, giving both groups more paying customers and potentially cutting the number of non-paying emergency room visits. If the subsidies were ruled invalid then many people would drop coverage due to the higher cost.
- Related tickers: (HCA +6.2%)(THC +5.4%)(UHS +2.6%)(CYH +5.4%)(LPNT +3.3%)(SEM -0.9%)(SSY)(HUM +0.1%)(CI -0.4%)(CNC)(MOH +0.3%)(ANTM +0.5%)(UNH +0.3%)(MGLN +0.3%)(WCG +0.3%)
Aug. 4, 2014, 4:24 PM
Jul. 25, 2014, 3:27 PM
- Money is flowing into hospital management firms today on bullish views about the impact of The Affordable Care Act. LifePoint Hospitals (LPNT +7.2%) leads the charge after it increased its earnings guidance earlier today.
- (UHS +6.6%) (HCA +2.3%) (SEM +0.4%) (THC +8.8%) (SSY -4.2%) (CYH +3.8%) (CHDX) (SCAI +1%) (ADPT -1.1%)
Jul. 16, 2014, 2:58 PM| Comment!
Feb. 25, 2014, 12:26 PM
- Tenet Healthcare (THC -10.6%) is the S&P 500's worst performer as Q4 earnings beat forecasts but took on $400M in new debt and offered lower-than-expected guidance; the hospital operator sees Q1 adjusted EBITDA of $350M-$400M and FY 2014 EBITDA of $1.8B-$1.9B vs. analyst consensus estimates of $447M and $1.96B.
- THC reported Q4 adjusted admissions fell 0.5%, as inpatient admissions fell 2.3%; operating margin narrowed to 4.3% from 9.1%, as operating expenses jumped 75%.
- CRT Capital downgrades THC to Fair Value from Buy as accretion from the Vanguard Health Systems acquisition has not materialized in the near-term; instead of generating significant EBITDA growth, the business contracted from Q4 to Q1 and CRT's guidance suggests that the business will continue to shrink.
- On the other hand, Mizuho says it would be buyers on today's stock weakness, viewing initial 2014 EBITDA guidance as achievable given conservative assumptions around health reform coupled with a continued soft admission outlook (Briefing.com).
Feb. 24, 2014, 12:35 PM
- Humana (HUM +9.4%) surges to new 52-week highs after saying proposed rate cuts to Medicare Advantage plans weren't as bad as expected.
- Health insurers who run Medicare Advantage face a 3.55% base payment cut next year, the U.S. government said late Friday; HUM now estimates the final reduction will be 3.5%-4% after projecting a 6%-7% reduction during its Q4 conference call earlier this month.
- “Although we still believe rate pressure of this magnitude will present a significant challenge to the company/industry, it is certainly much better” than previous estimates, a Susquehanna analyst says.
- Among the five largest publicly traded health insurance carriers, Medicare accounted for ~30% of earnings last year, Goldman Sachs says, with HUM and UnitedHealth (UNH +2.7%) the biggest players in the Advantage program.
- Other insurers: WLP +3.7%, HNT +3.5%, WCG +1.5%.
- Hospital stocks also are gaining: THC +3.1%, UHS +1.5%.
Nov. 5, 2013, 9:39 AM
- Tenet Healthcare (THC -7.7%) is trading sharply lower out of the gate following its Q3 report.
- For the period, adjusted EBITDA growth was 7.1%, compared to 16.7% growth in Q2 and 16.6% growth in Q1. In Q3 2012, adjusted EBITDA rose 40% (the most in a decade) so this might have been a tough compare.
- Adjusted admissions fall 0.5% while emergency department visits and outpatient visits rise 3.1% and 3.5% respectively.
- Adjusted EBITDA outlook for Q4: $400-450M (so Y/Y growth of between 19% and 34%) reflecting "assumptions for continuing soft inpatient volume growth and a less attractive payer mix." (PR)
Oct. 2, 2013, 3:16 PM
- "The more you're exposed to states with large numbers of uninsured people, the better it is for a hospital in the future," Tenet Healthcare (THC +6.8%) CEO Trevor Fetter tells CNBC, regarding the outlook for the industry now that Obamacare is in place.
- This bodes well for THC, as its purchase of Vanguard Health Systems (VHS) doubled the company's size in the state of Texas, adding what Fetter says are "important" markets in San Antonio, Brownsville, and Harlingen.
- The VHS acquisition was completed yesterday.
Sep. 9, 2013, 3:20 PM
- Shares of Tenet Healthcare (THC -4.3%) fall after Fitch and Moody's both assign junk-level ratings to its proposed offering of senior notes, which it announced on Friday in a private offering to help fund its Vanguard Health purchase.
- The tranche of $1.8B in senior secured notes received a BB/RR1 rating from Fitch and a Ba3 rating from Moody's, while its proposed $2.8B tranche of senior unsecured notes got a B-/RR5 rating from Fitch and a B3 grade from Moody's.
- Fitch kept its Negative Watch on the ratings, citing strained free-cash-flow generation and "industry-lagging profitability" at both THC and VHS, which it plans to acquire.
- Moody's confirmed its B1 corporate family rating on Tenet and its outlook for the ratings is stable. However, it downgraded Tenet's Speculative Grade Liquidity Rating to SGL-3 from SGL-2, citing the anticipated cash need associated with upcoming maturities, and a belief Tenet's liquidity will be constrained in the near term by significant capital spending requirements.
Jul. 16, 2013, 3:10 PM
Jun. 24, 2013, 2:40 PM"This marks a turning point for the company in which we'll be more aggressive in acquisitions," Tenet Healthcare (THC +5.2%) CEO Trevor Fetter tells CNBC, after agreeing to acquire Vanguard Health for $21/share. Fetter goes on to say that he looks forward to an "expanded acquisition pipeline in the acute care business." | Comment!
Jun. 24, 2013, 9:10 AM
Jun. 24, 2013, 6:58 AMHospital operator Tenet Healthcare (THC) has agreed to acquire smaller rival Vanguard Health Systems (VHS) for $4.3B including debt in a deal that will enable Tenet to expand into new territories. Tenet's offer of $21 a share represents a premium of 70% to Vanguard's Friday close of $12.37. Vanguard's shares are +66% premarket. (PR) | Comment!
Jun. 12, 2013, 8:30 AMDeutsche Bank is fond of its Health Management (HMA) takeout thesis (previous) and now says "recent management turnover" and the activist agenda of the company's largest shareholder (Glenview, 13D filing) "significantly increase the probabilities HMA's board could put the company in play." $20/share seems like a reasonable figure to DB and based on analyst Darren Lehrich's recent note, Tenet (THC) could be the bidder. HMA upgraded to Buy (PT to $18 from $12). Shares +11.27% premarket. | Comment!
Jun. 6, 2013, 11:35 AMMore interesting tidbits from Deutsche Bank's upgrade of Tenet Healthcare (THC +2.1%): Analyst Darren Lehrich (who spoke with management) says THC did not rule out "large-scale M&A (acquiring other investor-owned chains)," fueling some speculation about a deal for Health Management Associates (HMA +0.8%). A nice thought perhaps, but Lehrich says THC noted its recent strategy of "divesting rural assets," something HMA has a lot of. | Comment!
Apr. 30, 2013, 11:22 AMMore on Tenet Healthcare's (THC +2.2%) Q1: Shares trade higher after the company posts a narrow EPS beat. Excluding a restructuring, impairments, and costs related to acquisitions, the company managed to double its earnings thanks to "rapid" cost adjustments, CEO Trevor Fetter said, adding that the firm is witnessing a "soft volume environment." Competitors have reported similarly low Q1 admissions. THC also reaffirmed its FY13 guidance. (PR, Reuters) | Comment!
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