Earnings Miss: HCA Healthcare, Inc. Missed EPS By 19% And Analysts Are Revising Their Forecasts

Simply Wall St
October 28, 2020

Shareholders might have noticed that HCA Healthcare, Inc. (NYSE:HCA) filed its quarterly result this time last week. The early response was not positive, with shares down 4.0% to US$131 in the past week. It was not a great result overall. Although revenues beat expectations, hitting US$13b, statutory earnings missed analyst forecasts by 19%, coming in at just US$1.95 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for HCA Healthcare

NYSE:HCA Earnings and Revenue Growth October 28th 2020

Taking into account the latest results, the current consensus from HCA Healthcare's 18 analysts is for revenues of US$54.2b in 2021, which would reflect a modest 6.7% increase on its sales over the past 12 months. Per-share earnings are expected to grow 18% to US$11.89. In the lead-up to this report, the analysts had been modelling revenues of US$54.9b and earnings per share (EPS) of US$11.71 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$153. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values HCA Healthcare at US$172 per share, while the most bearish prices it at US$135. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the HCA Healthcare's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of HCA Healthcare'shistorical trends, as next year's 6.7% revenue growth is roughly in line with 5.9% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.9% next year. It's clear that while HCA Healthcare's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$153, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for HCA Healthcare going out to 2024, and you can see them free on our platform here..

Even so, be aware that HCA Healthcare is showing 2 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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