HCA Healthcare Stock Hit With Bear Note

HCA options volume is running at double the daily average

Deputy Editor
Sep 21, 2020 at 2:53 PM
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The shares of HCA Healthcare Inc (NYSE:HCA) are down 6.2% at $124 at last check, after J. P. Morgan Securities downgraded the stock to "neutral" from "overweight," with alongside a price-target cut to $143 from $161. The firm said that it is concerned by stalling national hospital revenue recovery, and that the death of renowned Justice Ruth Bader Ginsburg may put the Affordable Care Act (ACA) in jeopardy.

Today's pullback sent HCA to $119.12 at its session lows, but was captured by the 180-day moving average. Now trading at levels not seen since late July, the equity is down 16.2% year-to-date, and is starting the course toward a third-straight weekly loss.

A majority of analysts were looking quite bullish on HCA coming into today, with 14 out of the 17 in coverage carrying a "buy" or better rating. Meanwhile, the consensus 12-month price target of $147.05 is a 19% premium to current levels.

Taking a look at the options pits, calls have been popular in the last 10 weeks. This is per HCA's 50-day call/put volume ratio of 1.78 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 79% of readings in its annual range. 

Today, however, put volume is running slightly higher. So far, 2,403 puts and 2,324 calls have crossed the tape, double the usual intraday pace, and volume ranking in the 93rd annual percentile. Most popular is the October 115 put, where new positions are being opened. 

Lastly, HCA Healthcare stock's Schaeffer's Volatility Index (SVI) of 37% sits in just the 13th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment. This makes now a good time to weigh in on HCA options. 


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