Wells Fargo Downgrades Sun Healthcare Group (SUNH) to Market Perform; Skilled Nursing Industry Pricing Instability Likely To Continue

Wells Fargo downgraded Sun Healthcare Group (NASDAQ: SUNH) from Outperform to Market Perform. Valuation range slashed to $8-9 from $15-18.

Wells analyst says, "We are reducing our 2011E and 2012E EPS for Sun to $1.17 and $0.81 from $1.35 and $1.54, respectively. For shares of Kindred Healthcare, we have lowered our 2011E and 2012E EPS to $1.86 and $1.66 from $2.04 and $2.29, respectively. We have lower our valuation range for shares of KND to $20-23 from $25-29 and maintain our Market Perform rating. While some of the reimbursement risk is already reflected in the stocks we believe it could take more than one year for the industry to return to a stable pricing environment."

For more ratings news on Sun Healthcare Group click here and for the rating history of Sun Healthcare Group click here.

Shares of Sun Healthcare Group closed at $8.59 yesterday.

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