Deutsche Bank Downgrades Community Health Systems (CYH) and Universal Health Services (UHS) to Hold

October 7, 2008 8:31 AM EDT

Deutsche Bank downgrades Community Health Systems (NYSE: CYH) and Universal Health Services (NYSE: UHS) from Buy to Hold.

Deutsche analyst says, "While the economic backdrop will make for a tough 2009, we believe hospital shares may already price in much of the downside risk to earnings revisions...While the hospital group's heavy debt load looks ominous in the current environment, we stress the group has substantial cushion with regard to leverage ratio covenants; the group also has no refinancing risk over the next 365 days due to the fact that credit facilities still have lengthy terms and unused capacity...The combination of rising unemployment and weaker consumer balance sheets will most surely lead to a deterioration in both patient mix and collections."

Community Health Systems, Inc. (CHS) is an operator of hospitals in the United States.

Universal Health Services, Inc. is engaged in owning and operating, through its subsidiaries, acute-care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers.

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