UPDATE: DA Davidson Raises Target to $8 on Skilled Healthcare Group

DA Davidson raises its target on Buy-rated Skilled Healthcare Group SKH from $6 to $8 on raised projections for 2012 and 2013 following guidance from the company. DA Davidson says "Management has initiated a 2012 EPS guidance range of $0.78-$0.85 based on a revenue projection of $865-$880 million. We are raising our revenue forecast from $845 million to $865 million to reflect higher revenue per average patient day and higher ancillary revenues than we were previously assuming. Our 2012 EPS estimate is moved up from $0.75 to $0.81. Our 2013 EPS projection is lifted from $0.90 to $1.00 on a higher revenue assumption and improved confidence level that cost mitigation efforts will be fruitful. We continue to expect 2013 will benefit from lower interest expenses from refinancing opportunities." SKH closed at $6.71 a share on Tuesday.