Oppenheimer Sticks to Its Buy Rating for Community Health (CYH)

By Jason Carr

In a report released yesterday, Michael Wiederhorn from Oppenheimer maintained a Buy rating on Community Health (CYHResearch Report), with a price target of $5. The company’s shares closed yesterday at $3.44.

Wiederhorn noted:

“CYH reported Q1:19 adj-EBITDA of $391M, narrowly missing OPCO/Street estimates of $399M/$406M, while EPS ex-items of ($0.53) compared to OPCO/Street of ($0.55)/ ($0.47)E. Adjusted results primarily exclude a $0.26 impairment and $0.20 loss from the extinguishment of debt. CYH was able to build on the growth it recognized last quarter, with same-store revs growing 3.1%, including 0.8% from adj-admissions. Meanwhile, OCF of $133M was up from $106M in the prior period. Following the quarter, CYH maintained FY2019 adj-EBITDA guidance of $1.625-$1.725B, but lowered EPS guidance to ($1.85) to ($1.50) vs ($1.60) to ($1.25) due primarily to adjustments to below-the-line items like interest expense. As a result, we are lowering our FY2019/2020 EPS estimates to ($1.77)/($1.49) from ($1.49)/($1.43).”

According to TipRanks.com, Wiederhorn is a 5-star analyst with an average return of 13.9% and a 65.1% success rate. Wiederhorn covers the Services sector, focusing on stocks such as Cross Country Healthcare, Addus Homecare Corp, and The Ensign Group.

Community Health has an analyst consensus of Hold, with a price target consensus of $3.83.

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Based on Community Health’s latest earnings release for the quarter ending December 31, the company reported a quarterly revenue of $3.45 billion and GAAP net loss of $328 million. In comparison, last year the company earned revenue of $3.69 billion and had a GAAP net loss of $25 million.

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Community Health Systems, Inc. engages in the management and operations of hospitals. It operates general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services. The company was founded in March 1985 and is headquartered in Franklin, TN.