The Federal Reserve did its part this week to boost hospital stocks by again not raising interest rates.
Now the investor-owned hospital companies will have to prove with their earnings whether it's safe for investors to give them another look.
Community Health Systems and Tenet Healthcare Corp. are scheduled to release their first-quarter earnings after markets close Monday. HCA Holdings, the only hospital chain bigger than CHS and Tenet by revenue, reports earnings Tuesday.
The stock prices of CHS and Tenet swooned in the second half of 2015 as their earnings plunged on rising wages and a flattening of new volumes from the Affordable Care Act.
But those stocks could get new traction if first-quarter earnings improve, said Brian Tanquilut, senior vice president of healthcare equity research at investment firm Jefferies & Co. “We might see a little lift,” he said.
Meanwhile, the Fed left the fed borrowing rate at historic low levels of 0.25% to 0.5% with two small increases predicted to come later this year.
That was good news for investor-owned and not-for-profit hospital companies alike, because their growth is predominantly financed by debt.