...Solid Financial Flexibility: Fitch projects LPNT's leverage will sustain in the high 3x range, consistent with where it has operated in recent years (3.7x total debt/EBITDA at June 30, 2017). LifePoint's leverage is amongst the lowest in the for-profit hospital industry, commensurate with the financial flexibility appropriate for the 'BB' rating. The strength of the balance sheet provides the company with flexibility to pursue a growth-through-acquisition strategy that helps it pivot away from the secular challenges in the core portfolio; Fitch believes the company could increase debt to fund larger hospital purchases as it grows in size. Operating Headwinds Persist: LPNT's financial flexibility provides some cushion against secular headwinds to profitability and cash flow. Some of these are industry-wide concerns, including volume erosion due to increasing competitiveness of alternative and lower cost settings, and the reduction in cash incentives for demonstrating meaningful use of electronic...
