UPDATE: Morgan Stanley Initiates HCA Holdings at Overweight on Potential Reform Benefits

Morgan Stanley initiated HCA Holdings (NYSE: HCA) with an Overweight rating and a $47.00 price target.

Morgan Stanley noted, "Healthcare reform will support double-digit earnings growth for HCA from 2014 through 2016. We forecast EBITDA growth of 11.4% in 2014, 11.8% in 2015, and 10.6% in 2016 driven by reform, which contributes 5.6% to EBITDA in 2014, 7.8% in 2015, and 8.1% in 2016. Our model factors in: 1) uninsured adoption by state, allocating lives between exchanges and Medicaid, 2) pricing and enrollment for the exchanges, 3) pricing for Medicare, commercial and Medicaid, and 4) exposure to various regulated and proposed cuts including disproportionate share (DSH)."

HCA Holdings closed at $37.22 on Friday.

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