UPDATE: BMO Capital Markets Raises PT on HCA Holdings Following In-Line 1Q Results

In a report published Monday, BMO Capital Markets analyst Jennifer Lynch reiterated a Market Perform rating on HCA Holdings HCA, and slightly raised the price target from $42.00 to $43.00. In the report, Lynch noted, “While HCA volume metrics have held up better than peers' (same-facility adjusted admissions down 0.7% compared to down 3.4% on average across the coverage), 1Q results were not immune to volume weakness and the calendar shift. Reported 1Q results were in line with the quarter's preview for EBITDA and admissions growth, but EPS fell short of consensus. The company is actively managing labor arrangements and supply expense to bring costs more in line with demand. HCA has made contracting progress on the exchange front, with most major payors now engaged in discussions. BCBS represents roughly half of the contracts secured, and rates are largely consistent with commercial pricing (as the company expected). Subsidies and eligibility changes could offer patients a reason to delay elective procedures this year in the hopes of attaining better coverage in 2014. We continue to believe that medical demand could get worse before it gets better (in 2014), keeping us cautious here.” HCA Holdings closed on Friday at $40.73.