Shares of Community Health Systems have more than tripled since September — to their highest levels since the spring of 2016 — as investors began to look beyond the pandemic and took into account the changes CEO Tim Hingtgen and his team are making.
Two recent analyst calls have added to the momentum and suggest there’s more to come. Brian Tanquilut at Jefferies has lifted his rating on CHS to ‘buy’ from ‘hold’ and pushed his price target to $18 from $11. In a note to investors, Nashville-based Tanquilut said the fundamentals at Franklin-based CHS are improving and giving Hingtgen et. al the chance to build on growth plans. Also helping in that regard are the recent debt refinancings CHS has wrapped up to free up more cash.
Over at Credit Suisse, A.J. Rice is nowhere near as upbeat but has still upgraded CHS stock to ‘neutral’ from ‘underperform’ and lifted his target to $10 from $4.10. He also points to the refinancings as a positive factor.
CHS shares (Ticker: CYH) closed Wednesday at $13.18. They began the year at $7 and change and briefly topped $15 early this month. The company’s market capitalization now stands at about $1.7 billion.
Shareholders of HCA Healthcare late last month decisively turned away a proposal to incorporate more care quality metrics in the hospital giant’s executive pay plans.
A representative of the Graphic Benevolent Trust Fund affiliated with the Teamsters Union had put forward the plan calling for Nashville-based HCA to pull together a report analyzing whether and how quality metrics could be more widely featured in executive compensation. HCA’s current setup, Graphic’s representative noted, excessively emphasizes profit measures over quality metrics and called for the studying of possible new metrics as well as the decoupling of quality and financial benchmarks.
HCA’s board opposed the motion, defending its use of quality measures and noting that it has over time tweaked how the company’s top execs have been paid and incentivized. Because of that, directors said, a report such as the one envisioned by Graphic “would not provide meaningful information to stockholders, would not be a good use of the company’s resources, and is unnecessary.”
Shareholders took the company’s side: Investors holding only 28.5 million shares backed the proposal while shareholders representing nearly 262 million shares voted against it.
HCA shares (Ticker: HCA) closed Wednesday’s session at nearly $204. They have risen almost 25 percent year to date.