DaVita HealthCare Partners Inc. (DVA) Rating Lowered to Sell at Zacks Investment Research

DaVita HealthCare Partners Inc. (NYSE:DVA) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report released on Wednesday.

According to Zacks, “Over the past one year, DaVita has underperformed the broader industry in terms of price. DaVita ended second-quarter fiscal 2017 on a mixed note wherein adjusted earnings missed the Zacks Consensus Estimate while revenues beat the same. Davita’s revenues in the second quarter reflected significant year-over-year growth on the back of strong patient services. The company saw solid improvement in Kidney care in the quarter. DaVita also made efforts to control expenses in the second quarter. The company’s strength basically lies in its enhanced service offerings. A compelling inorganic growth story supported by its strong financial position is another positive. However, DaVita remains challenged by high debt levels, adverse effects of healthcare reforms, rise in Medicare costs, and an increase in Medicare Advantage (MA) beneficiaries. Also, MA rate cuts are likely to hurt the bottom line in the near future.”

Other analysts have also recently issued reports about the stock. TheStreet cut shares of DaVita HealthCare Partners from a “b” rating to a “c+” rating in a research note on Wednesday, August 2nd. Jefferies Group LLC cut shares of DaVita HealthCare Partners from a “buy” rating to a “hold” rating and lifted their target price for the stock from $64.89 to $70.00 in a research note on Monday, June 26th. KeyCorp reiterated a “hold” rating on shares of DaVita HealthCare Partners in a research note on Tuesday. Royal Bank Of Canada reiterated a “hold” rating and issued a $64.00 target price on shares of DaVita HealthCare Partners in a research note on Wednesday, September 6th. Finally, BidaskClub cut shares of DaVita HealthCare Partners from a “hold” rating to a “sell” rating in a research note on Saturday, July 8th. Four research analysts have rated the stock with a sell rating, six have assigned a hold rating and one has issued a buy rating to the company. The company presently has a consensus rating of “Hold” and an average price target of $66.50.

DaVita HealthCare Partners (NYSE:DVA) last released its earnings results on Tuesday, August 1st. The company reported $0.92 EPS for the quarter, topping analysts’ consensus estimates of $0.90 by $0.02. The company had revenue of $3.88 billion during the quarter, compared to analysts’ expectations of $3.82 billion. DaVita HealthCare Partners had a net margin of 8.68% and a return on equity of 14.02%. DaVita HealthCare Partners’s revenue for the quarter was up 4.3% on a year-over-year basis. During the same period last year, the business earned $1.01 EPS.

DaVita HealthCare Partners announced that its Board of Directors has approved a stock repurchase plan on Tuesday, October 10th that allows the company to buyback $1.50 billion in shares. This buyback authorization allows the company to purchase shares of its stock through open market purchases. Stock buyback plans are generally an indication that the company’s management believes its stock is undervalued.

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A number of hedge funds and other institutional investors have recently made changes to their positions in DVA. Pzena Investment Management LLC lifted its stake in DaVita HealthCare Partners by 2.1% during the 2nd quarter. Pzena Investment Management LLC now owns 3,398 shares of the company’s stock valued at $220,000 after acquiring an additional 71 shares during the period. Kovitz Investment Group Partners LLC acquired a new stake in DaVita HealthCare Partners during the 1st quarter valued at approximately $289,000. Eqis Capital Management Inc. lifted its stake in DaVita HealthCare Partners by 2.2% during the 2nd quarter. Eqis Capital Management Inc. now owns 4,600 shares of the company’s stock valued at $298,000 after acquiring an additional 100 shares during the period. First Financial Equity Corporation acquired a new stake in DaVita HealthCare Partners during the 1st quarter valued at approximately $304,000. Finally, Thrivent Financial For Lutherans lifted its stake in DaVita HealthCare Partners by 4.4% during the 1st quarter. Thrivent Financial For Lutherans now owns 5,730 shares of the company’s stock valued at $389,000 after acquiring an additional 240 shares during the period. Institutional investors and hedge funds own 83.27% of the company’s stock.

About DaVita HealthCare Partners

DaVita Inc, formerly DaVita HealthCare Partners Inc, operates two divisions: DaVita Kidney Care (Kidney Care) and DaVita Medical Group (DMG). The Kidney Care division consists of its the United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support.

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