UPDATE: Citigroup Raises PT on Community Health Systems Following HMA Acquisition Agreement

In a report published Wednesday, Citigroup analyst Gary Taylor reiterated a Buy rating on Community Health Systems CYH, and raised the price target from $50.00 to $60.00.

In the report, Citigroup noted, “CYH agreed to acquire HMA for $13.78/share + another possible $1/share via a contingent value right. This combined $13.78-14.78/share is lower than our latest $15-16 estimate, so we believe HMA shares will likely trade lower today. But this lower price is likely to be favorably received by CYH shareholders, although most likely would have preferred an all-cash deal. Even with HMA's lowered guidance today, we see the transaction as at least 15% accretive to CYH's 2015 EPS. We are skeptical that another buyer would emerge for HMA.”

Community Health Systems closed on Tuesday at $45.55.