DaVita Stock Gains. Volumes Are Improving After Covid-19.
stock was climbing Wednesday after the dialysis provider’s fourth-quarter financials came in above Wall Street’s consensus.
stock was surging 10% to $124.39, which would be the stock’s highest close since September 2021, and largest percentage increase since May 9, 2023, when a strong quarter sent shares soaring.
The stock, which was the second-best performer in the
Wednesday, has now gained 50% over the last 12 months, more than doubling the 20% rise in the index.
DaVita posted a “solid finish,” to 2023, and provided even better 2024 guidance, Truist Securities analyst David MacDonald wrote in a research note.
MacDonald increased his price target on DaVita stock to $130 from $120, while maintaining a Hold rating. He wrote that fourth-quarter financials and the full-year outlook were “nicely above both our estimates and consensus driven by expected volume improvements and continued strong cost controls.”
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After the close on Tuesday, DaVita reported fourth-quarter earnings per share of $1.87, beating Wall Street estimates for $1.63, according to FacttSet, and an increase from $1.11 a year ago. Revenue for the quarter was $3.15 billion, which beat the consensus call for $3 billion, and was higher than the $2.92 billion a year ago.
For the full year, DaVita expects to earnings per share of $8.70 to $9.80; the midpoint of $9.25 sits above the $8.82 analysts had expected.
“We enter 2024 with more confidence than we have had since the start of Covid in 2020,” CEO Javier Rodriguez said in the earnings report.
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BofA Securities analyst Kevin Fischbeck increased his price target to $126 from $115, but maintained his Underweight rating on the stock, and is waiting “to see more proof points on volume improvement.”
DaVita’s treatment volumes took a hit following the Covid-19 pandemic. However, Rodriquez said on the company’s earnings call that Covid-19 surges have weakened in magnitude with lower mortality rates, leading to “increased patient census for the first time since Covid started, and volume, it was approximately flat year-over-year, landing at the top of our guidance range.”
Write to Angela Palumbo at [email protected]
