Analysts Abandon Community Health Systems Bullish Case

Health and Healthcare

Published: February 16, 2016 2:05 pm

Last Updated: January 13, 2020 1:08 pm

Community Health Systems Inc. (NYSE: CYH) spooked investors badly enough that all hospital stocks were running in the red on Tuesday. The company complained about a weak flu season, bad debts rising and lower than expected patient volume in former HMA markets. There is even a delayed spin-off here.

Community Health Systems was among the worst performing stocks on Tuesday, with shares down about 26% on last look. 24/7 Wall St. wanted to see what some of the Community Health Systems’ stock analysts had to say about the move. As you can imagine, it wasn’t very complementary.

The first downgrade was brutal. Jefferies was the first call seen on Tuesday, a downgrade to Hold, but with the price target slashed and burned to $18 from $83. Ouch. Jefferies said that the company’s series of earnings misses will make it difficult for investors to fully trust management’s EBITDA guidance. The report further said:

Compounding this overhang is a general aversion toward levered names in the current market environment and a broad-based correction in hospital valuations that we believe will prevent Community Health shares from bouncing back meaningfully near-term.