UPDATE: UBS Downgrades Genesis Healthcare (GEN) to Sell

(Updated - February 8, 2016 11:46 AM EST)

UBS downgraded Genesis Healthcare (NYSE: GEN) from Neutral to Sell and lowred its price target to $1.50 from $2.50.

Analyst A.J. Rice commented, "We are moving our rating on GEN from a Neutral to a Sell rating. We have been concerned for some time about the secular challenges facing the SNF sector, such as flat-to-down census, higher managed Medicare penetration, and the risk of sector specific cuts targeting Medicare payments for therapy. GEN has a strong management team that has pursued initiatives, such as deal synergies, increased real estate ownership, HUD refinancing, portfolio pruning, and investment in specialty units. However, given its leveraged capital structure, its second significant earnings shortfall in the past five qtrs, limited institutional ownership (sub $5 price), the additional challenges of less accommodative debt and equity markets and the rollout of various bundled payment initiatives lead us to believe GEN shares face considerable headwinds."

For an analyst ratings summary and ratings history on Genesis Healthcare click here. For more ratings news on Genesis Healthcare click here.

Shares of Genesis Healthcare closed at $1.80 yesterday.

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