In a report out of Raymond James Tuesday morning, analyst John W. Ransom downgraded DaVita Healthcare DVA from an Outperform rating to a Market Perform rating, while removing his $125 price target on the company.
The report focused on a ruling Monday night that the worst case calendar year 2014 rebasing regulations had been decided upon, which would be very bearish for DaVita. Ransom believes the rebasement will result in a significant headwind- roughly $350 million or a drop in $2.00 for EPS.
A glimmer of hope was shown iun that the final rule could be better for the company, seeing as CMS is seeking out comments on phasing in the new rebasing.
Following the ruling and subsequent note, DaVita traded down sharply in the pre-market, recovering a bit at the open, and trading down 3.74 percent to $116.62 midway through the morning Tuesday.
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