HCA: Firm Lowers 2026 Guidance on Rising Uninsured Population and Related Pressures

Key Morningstar Metrics for HCA Healthcare

• Fair Value Estimate
  : $413.00
• Morningstar Rating
  : ★★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : Medium

On July 14, HCA Healthcare HCA released preliminary second-quarter results that appeared to exceed FactSet consensus. But given the rising uninsured population resulting from expired individual subsidies, the company lowered its 2026 profit outlook on the potential for higher uncompensated care costs.

Why it matters: Shares declined nearly 10% in early trading on this news, feeding investor fears about how new regulatory moves may affect HCA’s—and the rest of the hospital industry’s—profit growth trajectory, following several years of excellent results on surging medical utilization.

• The individual exchange population is declining due to expired subsidies. HCA previously estimated this would create a $600 million-$900 million EBITDA headwind for it in 2026. The company has now raised that estimate to $1.0 billion-$1.2 billion.
• With that new effect, HCA now expects adjusted earnings per share in 2026 of $28.70-$30.50, down from $29.10-$31.50 previously. We think this change may foreshadow a steeper impact than we expected in 2027-28, when Medicaid spending and supplemental payment cuts start.

The bottom line: We are trimming our fair value estimate to $413 per share from $444. This reflects a weaker near-term outlook for HCA, related to new regulatory concerns that should cut into the insured population and reduce direct payments to hospitals.

• The shares look likely to enter undervalued territory after this news, as investors focus on HCA’s weakening near-term momentum. Other hospital stocks are falling too, and they look undervalued from a long-term perspective.
• However, caution may be appropriate across the industry, as we remain unsure whether this is an HCA-specific problem in estimating new regulatory effects or if guidance cuts are likely across the board. We currently assume this is an estimation issue at HCA, but investors should recognize the potential for broader concern.