Some analysts are beginning to worry the fiscal cliff negotiations between President Barack Obama and Congress will eventually involve concessions from healthcare providers, and three for-profit hospital stocks were downgraded yesterday as a result, according to a MarketWatch report.
Robert W. Baird & Co., a wealth management and private equity firm that is part of Baird, lowered the outlook for Franklin, Tenn.-based Community Health Systems, Naples, Fla.-based Health Management Associates and Nashville, Tenn.-based Vanguard Health Systems to "neutral" from their previous rating of "outperform."
Baird analysts said Nashville, Tenn.-based Hospital Corporation of America and King of Prussia, Pa.-based Universal Health Services will remain as the only two for-profit hospital operators with the "outperform" rating, but their price targets for the rest of the year were lowered, according to the report.
"We're stating the obvious, but Medicare policy is almost 100 percent driven by deficits, and we're of the opinion additional provider rate cuts will be included in any 2013 coordinated deficit deal," said Baird analyst Whit Mayo in a note to clients. "Many providers carry elevated exposure to potential targeted supplemental payments. Deficit proposals are likely to present downside risk and volatility."
At the close of the bell yesterday, Health Management's shares dropped more than 4 percent, while CHS shares lost 3 percent. Vanguard shares ended the day down 2 percent.
Robert W. Baird & Co., a wealth management and private equity firm that is part of Baird, lowered the outlook for Franklin, Tenn.-based Community Health Systems, Naples, Fla.-based Health Management Associates and Nashville, Tenn.-based Vanguard Health Systems to "neutral" from their previous rating of "outperform."
Baird analysts said Nashville, Tenn.-based Hospital Corporation of America and King of Prussia, Pa.-based Universal Health Services will remain as the only two for-profit hospital operators with the "outperform" rating, but their price targets for the rest of the year were lowered, according to the report.
"We're stating the obvious, but Medicare policy is almost 100 percent driven by deficits, and we're of the opinion additional provider rate cuts will be included in any 2013 coordinated deficit deal," said Baird analyst Whit Mayo in a note to clients. "Many providers carry elevated exposure to potential targeted supplemental payments. Deficit proposals are likely to present downside risk and volatility."
At the close of the bell yesterday, Health Management's shares dropped more than 4 percent, while CHS shares lost 3 percent. Vanguard shares ended the day down 2 percent.
More Articles on For-Profit Hospitals:
New York City Hedge Fund Purchases 8.4% of CHS Shares
CHS Revises Credit Agreement for Acquisition Flexibility
UHS to Pay Cash Dividend Next Month