Hospital operators fall after Raymond James cuts ratings on near-term challenges

Tenet Healthcare

22/11/2024 15:01

** Shares of hospital operators HCA Healthcare  HCA.N ,
Tenet Healthcare  THC.N  and Community Health Systems  CYH.N 
fall between 1% and 6% in early trading 
    ** Brokerage Raymond James downgrades hospital group ahead
of potential headwinds including an expected reduction in 2026
in the number of patients seeking hospital services under
Obamacare plans, which currently represent a high single digit
percentage of revenues 
    ** Downgrades HCA to "market perform" from "outperform" and
THC to "outperform" from "strong buy" citing that their revenues
are most likely to be hurt due to a reduction in volumes 
    ** Brokerage expects about 20% drop in Obamacare patients
across the sector, due to a new republican run government, and
additional subsidies related to these plans for hospitals ending
in 2025 
    ** Brokerage also cuts CYH to "underperform" from "market
perform" and maintains rating on UHS at "market perform"
    ** Adds that potential reform of state-backed Medicaid
insurance plans is another point of risk for hospitals as
patients from these plans have represented an improving source
of earnings and margins
    ** As of last close, HCA up 20.5% , UHS up 29%, CYH up 13%
and THC up 90% 

 (Reporting by Sriparna Roy and Bhanvi Satija in Bengaluru)
 ((Bhanvi.Satija@thomsonreuters.com; Outside U.S. +91
9873062788;))