UPDATE: Bank of America Downgrades Select Medical to Neutral, Raises PT
In a report published Monday, Bank of America downgraded its rating on Select Medical Corporation (NYSE: SEM) from Buy to Neutral, but raised its price target from $10.00 to $11.50.
Bank of America noted, “We are generally cautious on post-acute providers due to their exposure to potential Medicare cuts. SEM has been our favorite post-acute name due to the upside potential from the turnaround of recent deals and its aggressive capital deployment (i.e. share repo). We expect SEM to outperform its post-acute peers largely on the heels of more aggressive capital deployment. SEM is facing a 2% cut from sequestration in 2013, and given its Medicare exposure (51% of rev), additional cuts would be harder to offset (another 2% cut in 2013 would be $0.13/sh or 13% hit to SEM).”
Select Medical Corporation closed on Friday at $10.74.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.