HCA Holdings. (NASDAQ: HCA)
Healthcare; Hospitals; 10%-15% Upside
Assumptions:
Assumptions:
- EPS is expected to grow at CAGR of 11% during 2015-2019. 0% growth is assumed in perpetuity.
- Retained earnings are projected to turn positive during 2018
- CAPM is used to calculate the cost of equity. NASDAQ composite is assumed to reflect the return on market.
Observation: The stock lost around 6% of its value during the last month. However, the EVA based valuation indicates that the market may be over reacting. The stock has the ability to touch $100, translating into a 15% upside.
Detailed thesis and Monte Carlo simulation is available on Prudena.
- EPS is expected to grow at CAGR of 11% during 2015-2019. 0% growth is assumed in perpetuity.
- Retained earnings are projected to turn positive during 2018
- CAPM is used to calculate the cost of equity. NASDAQ composite is assumed to reflect the return on market.
Observation: The stock lost around 6% of its value during the last month. However, the EVA based valuation indicates that the market may be over reacting. The stock has the ability to touch $100, translating into a 15% upside.
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