UPDATE: Deutsche Bank Downgrades DaVita to Hold; Risk/Reward Now Balanced

Deutsche Bank downgraded DaVita

from Buy to Hold and lowered the price target from $136.00 to $130.00. Deutsche Bank noted, "Since announcing the HCP deal in May 2012, DVA shares have responded favorably to the prospects of this new growth segment that positions it to capitalize on the paradigm shift from fee-for-service to fee-for-value health care. We are big believers in the potential of this new business model, and we are comfortable with the outlook for the base dialysis services business. However, at current valuations (~15x 2013E cash EPS / 8.5x EV/EBITDA), we believe the market has caught on sufficiently to the story. And given heightened risks in the Medicare Advantage space, where HCP derives most of its profits, we believe risk/reward is now more in balance." DaVita closed at $121.95 on Wednesday.