Deutsche Bank Downgrades Community Health (CYH) to Hold; Headwinds Appear Too Strong

Deutsche Bank downgraded Community Health (NYSE: CYH) from Buy to Hold, price target lowered from $27 to $15.

Deutsche analyst says, "We consider CYH to be the riskiest name in the group due to its high leverage (~5x) and its large July 2014 Term Loan debt maturity, which includes $4.5 billion of outstanding loans."

"Our 2012 adjusted EBITDA forecast is $1.882 billion (from $1.937 billion) and reflects a 12.5% margin (down from 12.9%). For valuation purposes, we forecast 2012 adjusted EBITDA less minority interest expense of $1.803 billion. We’ve lowered our 2012 EPS for CYH to $3.00 (from $3.37 and vs. $3.48 for consensus), reflecting our belief that SS margins could deteriorate further, while CYH’s recent acquisition classes continue to progress slowly from a margin perspective."

For more ratings news on Community Health click here and for the rating history of Community Health click here.

Shares of Community Health closed at $15.70 yesterday.

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