JPMorgan analyst Gary Taylor downgraded Universal Health Services (NYSE: UHS) from Neutral to Underweight with a price target of $115.00 (from $138.00).

The analyst comments "UHS is the largest inpatient psychiatric hospital operator in the U.S. and also a large regional acute medical hospital operator with leading share in Las Vegas and South Texas markets. UHS has an under-levered balance sheet, strong free cash flow generation, conservative management, and a shareholder friendly capital allocation history. While the acute-care business is currently outperforming given a strong economic rebound in certain markets, we believe growth rates have peaked. We see the expanding market for behavioral services (and inherently lower capital intensity) as the key driver of value over the intermediate term, and we expect UHS to close the valuation gap to pure-play ACHC."

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Shares of Universal Health Services closed at $117.93 yesterday.