UPDATE: J.P. Morgan Upgrades NxStage Medical to Overweight

J.P. Morgan is out with its report today on NxStage Medical NXTM, upgrading NXTM from Neutral to Overweight. In a note to clients, J.P. Morgan writes, "We are upgrading shares of NxStage Medical from Neutral to Overweight. NxStage shares are off sharply since the 1Q EPS call in early May, driven largely by concerns that a key customer (Fresenius) is restricting the number of patients it will support on home hemodialysis. We view concerns at this point as overdone, based on: (1) our survey work, which suggests sustainable 30% growth for the U.S. HHD market over the next few years; (2) our view that any restrictive behavior by FME will be (a) manageable (with FME representing <10% of home sales) and (b) short term in nature; and (3) the potential for clarification of the Medicare home reimbursement process in the next 24 months (and possibly as early as this summer), improving access to HHD." J.P. Morgan maintains a $26 PT on NXTM. Shares of NXTM closed Thursday at $17.85, up 2.94% from Wednesday's close.