J.P. Morgan Raises Target On Skilled Healthcare Group (SKH)

J.P. Morgan Chase & Co. has a Neutral rating and is raising its price target to $12 from $10 on shares of Skilled Healthcare Group, Inc. SKH. In a note sent to clients, J.P. Morgan writes, "We are raising our yearend price target to $12 from our prior target of $10 on the better than expected 2011 outlook resulting from RUG-IV performance. Under an OpCo/PropCo valuation, we estimate the shares could be valued in the low teens and potentially higher which should continue to help provide support. The recent HCP/ManorCare sale/leaseback transaction and Sun Healthcare REIT conversion highlighted the embedded real estate value of the company which had been an under appreciated option in the shares." Shares of SKH gained $1.13 yesterday to close at $10.66, a gain of over 11%.