UPDATE: Morgan Stanley Initiates Community Health at Overweight on Attractive Risk/Reward

Morgan Stanley initiated Community Health CYH with an Overweight rating and a $45 price target. Morgan Stanley noted, "Community has the highest upside in our coverage supporting an attractive risk reward. Community is the levered play on hospitals and will benefit the most from an industry wide multiple expansion once the uncertainty around future deficit cuts is resolved. While the company has some risks, we think its improving financials and highest exposure to reform supports the most potential valuation upside in the group. CYH has seen improving financials and admission trends since the steep downturn after the Tenet accusations. While the government investigation continues to pose a risk to the stock, we think the company is well positioned to see continued improvement in underlying trend as it moves away from that period." Community Health closed at $35.57 on Wednesday.