UPDATE: Bank of America Downgrades Kindred Healthcare to Underperform

Bank of America has published a research report on Kindred Healthcare

and has downgraded the company from Neutral to Underperform. In the report, Bank of America writes, "We are downgrading KND to Underperform from Neutral and reducing our Price Objective to $11 from $13 as we see a high risk of additional rate cuts over the next couple of years which not only would be difficult to offset, but should weigh on perception/multiple of the industry. The story for KND is the RehabCare deal, and while the synergies keep on coming in higher than initially expected, so too have the rate cuts, essentially offsetting the RHB upside. We continue to believe that KND is better positioned than its Skilled Nursing Facility (

) peers to weather cuts (reflected in a higher PO multiple), but industry headwinds could limit upside and in our view merit an Underperform rating similar to that for other SNFs." Bank of America has also lowered the price objective from $13 to $11 on Kindred Healthcare, which is currently trading down $0.87 from Friday's $11.77 closing price.