HCA Earnings: Rising Medical Utilization Boosts the Top U.S Hospital Chain's Fair Value

Narrow-moat HCA Healthcare turned in better-than-anticipated fourth-quarter results that benefited from improving medical utilization trends and easing labor pressures. Considering these strong trends and cash flows generated since our last valuation update in early 2023, we are moderately increasing our fair value estimate on HCA to $285 per share from $260. While providers like HCA may continue to benefit from the increasing medical utilization trends that are constraining health insurer results in 2024, we view HCA shares as about fairly valued.