UPDATE: JP Morgan Initiates Community Health Systems at Overweight on Reform-Based Coverage Expansion

JP Morgan initiated coverage on Community Health Systems

with an Overweight rating and a $38 price target. JP Morgan noted, "Community offers solid upside potential from reform-based coverage expansion, especially when considered against its 5.0x DEBT/EBITDA ratio. While leverage adds risk to the downside should the unforeseen occur, our JP Morgan Healthcare Reform Model estimates that CYH has the potential to see ~8.5% EBITDA upside from reform relative to our baseline model with its significant leverage leaving equity holders in the position to derive relatively outsized benefit in the form of stock price appreciation." Community Health Systems closed at $30.32 on Friday.