Update: Jefferies Slashes Price Target On Sun Healthcare Group

Jefferies & Co. is out with a research report on Sun Healthcare Group SUNH and it slashed the price target to $3.50 from $9, and it has a Hold rating on shares. In a note to clients, Jefferies & Co. writes, "Despite solid Q2 results, SUNH's earnings visibility has deteriorated significantly following CMS's announcement of an 11.1% Medicare FY12 rate cut. We expect management to provide some high level commentary on today's call, but it will take time before the full impact can be more accurately quantified, leading us to believe that the stock will be range-bound near-term. Maintain Hold/$3.50 PT (revised)." Shares of SUNH lost $3.65 yesterday to close at $3.35.