UPDATE: Deutsche Bank Downgrades Mednax to Sell, Lowers PT

In a report published Wednesday, Deutsche Bank downgraded its rating on Mednax

from Hold to Sell, and lowered its price target from $73.00 to $58.00. Deutsche Bank noted, “We believe the investment case on MD could be challenged over the next 12 months against a backdrop of policy initiatives to reduce NICU utilization. Empirical evidence of NICU pressure is beginning to surface, yet we believe industry and government initiatives are accelerating in a manner that are likely to challenge MD's base business. The Sell rating underpins our view that: (1) Street estimates for 2013 are too high; (2) MD's trading multiple may slip if fundamentals become less certain; (3) anesthesia upside is already baked-into expectations; and (4) the market may assign only transient value to Medicaid rate parity (although a clear upside risk to 2013-2014 EPS).” Mednax closed on Tuesday at $66.74.