UPDATE: Bank of America Raises PO to $108 on DaVita on Better Dialysis Regulation

Bank of America reiterates its Buy rating on DaVita (NYSE: DVA) and increases its price objective from $100 to $108.

Bank of America comments, "CMS issued the 2013 proposed dialysis regulation (effective 1/1/13). Overall, the rate update of 3.1% (+1.1% post sequestration) is better than expected, and in a positive CMS did not include specific commentary suggesting it will rebase rates in the near future (although we still believe a rebasing is inevitable and 2014 changes are likely given lower EPO utilization). We continue to like DVA given its strong organic growth and good FCF, as well as the benefits of the HCP deal. We are raising our PO to $108 from $100."

DVA closed at $97.62 on Monday.

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