JP摩根美股医疗保健行业2019年春季美国医疗设施与管理式医疗更新20194181页

1NorthAmericaEquityResearchApril2019HealthcareFacilities&[e-mail]HCAREFACILITIES&MANAGEDCARE2019SpringUpdateDiversifiedHMOs|GovnHMOs|AcuteCare|Sub-Acute|Outpatient|[e-mail]eendpagesofthispresentationforanalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.2Thesis,TopPicks,Catalysts&“Out-of-Consensus”HighlightsSource:J.P.MorganandBloomberg.LONG-TERMTHESISRecommendowningpayorsvsproviders.Managedcarerepresentsahigh-ROICplayonthelongest-durationsecularinvestmenttrendintheUS;healthcarespendinggrowthGDPgrowth.Providersgenerallyrepresentalower-ROICplayonthatsameseculartrend.Thelong-termshiftfromFFStoValueshouldreducevolatilityofearningsforpayorswhilethreateninggrowthandincreasingvolatilityforproviders.WebelieveM4Awillultimatelyfail.NEAR-TERMPOSITIONINGPayors(~):WeseeamodestreboundaftertheworstM4Abullet,Biden’slikelydeclaration&strong1Q19earnings.Providers(-):Weremainonlyselectivelypositive.TheYTDshortralliesdon’tseemsustainableon2H-loadedguidance,weakvolumes&politicaluncertainty.TOPPICKSHUM–Wellpositionedpure-playMAstorywithstrongfundamentals.“Thesimpleststoryinhealthcare”.CATALYSTCALENDARMA2020AdvanceNoticeFinalRuleApr1HHSDrugRebateRuleCommentsDueApr8UNH2Q18EarningsApr16PlaintiffResponseDueinACA5thCircuitApr24ReplyBriefsDueinACA5thCircuitMay15MOHInvestorDayNYCMay30CignaInvestorDayNYCMay312020MA/PDPBidsDueJune3CVSInvestorDayNYCJune4CNCInvestorDayNYCJune14FirstDemocraticPresidentialDebatesJune26-27TexasSTAR+Plus,STAR,ChipRFPAward~June/July5thCircuitAppealsCourtRuleonTXACACase~Oct/NovOUT-OF-CONSENSUSIDEAS1)TheSenatelikelyremainsakeybarriertohealthcarereformbeyond2022.2)NeitherpayorsnorproviderstradeddefensivelyvsSPXduringthelasttworecessions.Payorstendtooutperformproviders&SPXinratetighteningcycles.3)NFPBlues’commercialgroupmarginsdeterioratingin2018,whichmaymitigate2019pricingpressure,contrarytothe“improvingRBC”thesis.4)MCOparitywithSPXvaluationiswarranted,inourview,&sustainableasconsolidation&diversificationreducedearningsvolatilityoverthelastdecade–however,weexpectrelativevaluationstobepressuredduringthe2020electioncycle.5)FLhospitalsshouldnotexperiencematerialEBITDAgrowthfromMDCDexpansiondueto“crowd-out”ofHIX-subsidizedpopulation133%FPL.6)Despitea3%2019IPPSincrease,netMDCRpricingislikelyamodestheadwindforallexceptHCAduetosharplylowerOPPS(anniversaryof340bbenefit).7)DVAderives60%+ofEPSfromitscontributionstoAKF.OUT-OF-CONSENSUSRATINGSTHC–JPM“Underweight”vsStreet90%“Buy”or“Hold”–Sell“RemainCo”DVA–JPM“Neutral”vs.Street62%“Buy”MOH–JPM“Overweight”vs.Street59%“Neutral”or“Sell”UHS–JPM“Neutral”vsStreet55%“Buy”CROWDEDHEDGEFUNDPOSITIONSNetLong:THC(17%),MD(11).NetShort:CYH(-8),ACHC(-3)Controversial:THC(+27/-10%),MOH(+9/-6),ACHC(+12/-15),CYH(+16/-24).ACUTESEASONALITYJan(-1.8%)Feb(0.0%)Mar(-0.2%),1Q19:-0.7%2Q19:-0.3%3GaryTaylor|[e-mail]4/1/2019JPMEPSGrowthP/EEV/EBITDACompany/SubsectorTickerPriceTargetMktCapRatingC'19EC'20EC'21EC'19EC'20EC'21EC'19EC'20EC'21EAcuteCareHospitalsCommunityHealthCYH$3.85na$434UW3%(17%)(8%)------9.1x8.9x8.7xHCAHCA$131.98$151$46,576OW7%9%8%13.3x12.2x11.4x8.8x8.4x8.0xTenetHealthcareTHC$29.76$23$3,075UW7%(3%)19%15.1x15.6x13.1x7.9x7.7x7.5xTotalMarketCap$50,085Median:5%2%(0%)14.2x13.9x12.2x8.8x8.4x8.0xSub-AcuteCareAcadiaHealthcareACHC$29.66$32$2,593N(9%)5%5%14.1x13.4x12.8x10.0x9.4x9.0xUniversalHealthServicesUHS$134.75$147$12,633N2%6%9%14.0x13.1x12.1x9.1x8.9x8.5xTotalMarketCap$15,226Median:(4%)6%7%14.0x13.3x12.4x9.5x9.2x8.8xOutpatientCareDavitaIncDVA$54.92$63$9,144N38%15%16%11.8x10.3x8.8x7.2x7.0x6.6xOutsourcedServicesMednaxIncMD$27.77$39$2,451N(4%)6%9%8.3x7.8x7.2x7.9x7.7x7.3xManagedCare-DiversifiedAnthemANTM$288.33$338$76,177OW21%18%14%15.0x12.8x11.2x13.5x11.9x10.9xCignaCI$161.87$250$62,433OW15%12%13%9.8x8.8x7.8x9.6x9.1x8.4xHumanaHUM$268.33$343$36,895OW21%14%12%15.2x13.3x11.8x11.2x10.0x9.1xUnitedHealthUNH$245.54$301$241,120OW13%15%13%16.8x14.7x13.0x13.0x11.7x10.8xTotalMarketCap$416,626Median:18%15%13%15.1x13.0x11.5x12.1x10.8x9.9xManagedCare-MedicaidCenteneCNC$54.16na$22,761NR19%14%11%12.8x11.2x10.1x10.0x9.0x8.3xMolinaMOH$144.70$169$9,637OW(7%)16%10%14.5x12.4x11.3x10.5x9.3x8.7xWellcareWCG$273.64na$13,834NR28%16%16%19.4x16.7x14.4x14.9x11.5x10.1xTotalMarketCap$46,231Median:19%16%11%14.5x12.4x11.3x10.5x9.3x8.7xSource:J.P.Morgan,BloombergHealthcareFacilities&ManagedCareCoverageUniverse4GaryTaylor|[e-mail]:J.P.MorganPage52018PerformanceReviewPage7TopicalIssues:Spring2019Page34ReviewofRecentFundamentalsPage52OurLong-TermThesisPage89CompanyOverviews&ModelsPage121RegulatoryCalendarPage122ManagedCare101P