Deutsche Bank Downgrades Health Management (HMA) to Hold; Headwinds Appear Too Strong

Deutsche Bank downgraded Health Management (NYSE: HMA) to Hold with a price target of $7.50.

Deutsche analyst says, "We believe HMA is capable of delivering double-digit growth in 2012, and therefore we believe it should be one of the first companies to which GARP/value investors gravitate if/when the legislative environment settles down. HMA’s growth in 2012 should be led by its recent deal to acquire 7 hospitals in Knoxville, TN that comprise the newly named Tennova Healthcare system. Yet, HMA’s organic growth (particularly volumes) have slowed in recent quarters and we believe a further deceleration of growth could lead to weaker SS margins. This concern, coupled with HMA’s relative high leverage (estimated to be ~4.3x pro forma for Knoxville) make us believe the company’s balance sheet flexibility could be limited for the foreseeable future."

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

Shares of Health Management closed at $6.40 yesterday.

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