HCA Healthcare surges 11% on $10B buyback, 8.3% dividend hike
Hospital operator delivers strong Q4 earnings and bullish 2026 guidance as shares hit record
HCA Healthcare shares surged more than 11% on Tuesday after the hospital operator reported better-than-expected quarterly earnings, announced a massive $10 billion stock buyback program, and raised its dividend by 8.3%, signaling confidence in its financial trajectory heading into 2026.
The Nashville-based company, which operates 186 hospitals and nearly 2,000 outpatient facilities across 21 states and the United Kingdom, saw its stock climb to $525.72, adding roughly $11 billion to its market capitalization in a single session. The rally pushed shares above their previous 52-week high of $519.23.
HCA reported fourth-quarter results that showed revenue reaching $75.6 billion for full-year 2025, a 7.1% increase from the previous year, while net income jumped 17.8% to $6.8 billion. Same-facility revenue grew 6.6% for the year, with equivalent admissions rising 2.4%, indicating robust patient demand despite broader economic pressures.
The capital allocation announcements underscored management's optimism about the company's profitability outlook. HCA's board approved a repurchase authorization of up to $10 billion of common stock, a move that typically signals executives believe shares are undervalued. Additionally, the company increased its quarterly dividend by 8.3%, continuing a pattern of shareholder-friendly policies that have made HCA attractive to income-focused investors.
"We are pleased with our strong operational performance in 2025, which reflects the dedication of our colleagues and the ongoing demand for our services," said Sam Hazen, HCA's chief executive officer. The company provided 2026 revenue guidance of between $76.5 billion and $80 billion, suggesting continued growth momentum despite potential headwinds.
Analysts responded positively to the announcements. Of the 25 analysts covering HCA, 15 rate the stock a buy or strong buy, with an average price target of $488.29. However, Tuesday's rally pushed the stock significantly above that consensus target, reflecting the market's enthusiastic reception to the earnings beat and capital allocation news.
The company's valuation metrics appear reasonable despite the recent surge. HCA trades at 18 times trailing earnings and 15.8 times forward estimates, below its historical average for a company delivering 42.6% quarterly earnings growth on a year-over-year basis. The stock's forward price-to-earnings ratio suggests investors are pricing in moderate growth expectations despite the strong recent performance.
HCA's strength comes as the broader healthcare sector navigates significant transformation. The industry is undergoing rapid digital transformation with artificial intelligence and machine learning integration, while also facing persistent challenges including staffing shortages, cybersecurity threats, and pressure to improve operational efficiencies.
The hospital operator's focus on same-facility growth and operational excellence has positioned it well to capitalize on these trends. With margins expected to gradually recover across the healthcare sector from 2026 onwards, HCA's scale and efficiency advantages could provide a competitive edge against smaller regional operators.
The $10 billion buyback authorization represents a significant commitment to returning capital to shareholders, equivalent to roughly 9% of the company's current market capitalization. Combined with the dividend increase, the moves suggest HCA's management believes the company has sufficient internal growth opportunities while also generating excess cash flow that can be deployed to shareholders.
Investors will be watching HCA's execution on its 2026 guidance, particularly whether the company can maintain its admission growth and pricing power amid potential regulatory changes and competitive pressures in key markets. The company's ability to integrate digital health technologies and improve patient outcomes while controlling costs will be critical to sustaining its current growth trajectory.
Tuesday's surge reflects growing confidence that HCA can navigate these challenges while continuing to deliver strong financial results. With the stock now trading at record levels, the coming quarters will test whether the company's fundamentals can justify its elevated valuation and support the bullish outlook articulated by management.