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LHC Group (LHCG) and CHRISTUS Health Extend JV Partnership

Zacks Equity Research
·4 min read

LHC Group, Inc. LHCG recently expanded its joint venture (JV) partnership with CHRISTUS Health via an agreement of adding a hospice provider in San Marcos, TX. This will help in bringing compassionate and quality care to more patients. Notably, the agreement is expected to be finalized on Nov 1, 2020, on completion of customary closing conditions.

Notably, since 2017, Irvin, TX based CHRISTUS Health, which is an international Catholic, faith-based, not-for-profit health system, has been JV partners with LHC Group. Through this partnership, both the companies utilize their expertise to create new opportunities to build and expand in-home and facility-based services in the communities they cater to.

LHC Group has long been focusing on acquisitions and JVs for inorganic expansion. The company’s pipeline of potential M&A growth opportunities remains robust and is well balanced between Home Health and Hospice. Hence, the extension of this partnership is likely to boost inorganic expansion.

More on the News

All throughout the COVID-19 pandemic and public health crisis, LHC Group and CHRISTUS Health have been consistently delivering industry-leading quality care in the most cost-effective setting via the partnership. The two healthcare organizations have managed to build a safe and compassionate delivery model, which includes adherence to COVID-19 protocols, communicating on capacity planning, and LHC Group’s ability to accept and treat patients at the top of the home-health acuity capability.

LHC Group — a leading national provider of in-home healthcare services and JV partner of choice for about 400 hospitals throughout the United States — and its partners help to deliver a level of in-home healthcare service that is acknowledged industry-wide for sustained quality. By working together LHC Group and its partners boost home health services, help in better coordination of care delivery and simplify the process of transitioning patients from the hospital to the recovery setting.

On finalization of the agreement, the partnership will include 22 home health, hospice, palliative care, community-based, and long-term acute care locations across three states.

Market Prospects

Per a report by Grand View Research, the global home healthcare market was worth $281.8 billion in 2019 and is anticipated to witness a CAGR of 7.9% from 2020 to 2027. Aging population globally and rising patient preference for value-based healthcare are expected to drive market growth. Hence, the expansion of this partnership is a well-timed one.

Recent Development

On Aug 1, 2020, LHC Group finalized a JV with Orlando Health to boost home health and home and community-based services (HCBS) in the state of Florida. The company anticipates that JV to account for almost $3.5 million in incremental annualized revenues.

On the back of the M&A pipeline and historic organic growth opportunity, LHC Group remains optimistic and bullish on both organic and M&A growth opportunities for the remainder of 2020, 2021 and beyond.

Price Performance

Shares of this Zacks Rank #2 (Buy) company has gained 93.9%, compared with the industry’s rally of 44.8% in a year’s time.

Other Stocks to Consider

Some other top-ranked stocks from the broader medical space include DaVita Inc. DVA, Boston Scientific Corporation BSX and Thermo Fisher Scientific Inc. TMO. While Boston Scientific carries a Zacks Rank #2, both DaVita and Thermo Fisher sport a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DaVita has a projected long-term earnings growth rate of 11.9%.

Boston Scientific has an estimated long-term earnings growth rate of 10%.

Thermo Fisher has a projected long-term earnings growth rate of 15.5%.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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