By Manas Mishra

(Reuters] – The U.S. could be hit with a persistent shortage of nurses, and associated costs. This would reduce the profits of American hospital owners and negate the benefits of increased Delta hospitalizations.

Wall Street analysts anticipate HCA Healthcare, the largest hospital operator listed on the NYSE, Inc to announce a close doubling of its quarterly earnings. But, the profit margins could be under threat from rising costs. This company will release its results on Friday.

Ann Hynes, Mizuho Securities analyst for HCA stated in a research paper that “elevated nursing expenses and labor pressures” will continue in the third quarter 2021.

Nationally, hospitals are having difficulty filling nursing positions and must pay more to retain and recruit nurses. This is a costly cost they can’t afford in these tight economic times.

“Because of a shortage, people will spend astronomical amounts in order to obtain the nurses that are essential for taking care patients,” Tammy Lundstrom (chief medical officer, Trinity Health), a not-for profit hospital system.

HCA Healthcare and smaller rival Tenet’s quarterly sales https://fingfx.thomsonreuters.com/gfx/mkt/mypmngqbkvr/nLM8w-hca-and-smaller-rival-tenet-s-quarterly-sales-so-far-.png

THE FUNDAMENTALS

** Nashville, Tennessee-based HCA is expected to report a 8.7% increase in revenue to $14.47 billion from $13.31 billion a year ago.

** The mean analyst estimate for Tenet’s earnings is $1.02 per share, while the mean analyst estimate for HCA’s earnings is $4 per share.

** HCA currently trades at 13.8x NTM P/E vs median of 12.9x NTM P/E for the wider health care provider sector.

WALL ST. SENTIMENT

** The current average analyst rating on HCA shares is “buy”

** Seven analysts rate HCA “strong buy”, 13 rate it “buy” and six rate it “hold”

** Wall Street’s median 12-month price target is $278.64

** HCA’s shares have risen over 80% in the past 12 months