J.P. Morgan Raises Target On Sun Healthcare Group (SUNH)

J.P. Morgan Chase & Co. is raising its price target on shares of Sun Healthcare Group SUNH to $15 from $14, but it has a Neutral rating on shares. In a note sent to clients, J.P. Morgan writes, "As has been the recent theme amongst the publicly traded SNFs, SUNH indicating RUG-IV will be an EBITDAR contributor. This as the higher Medicare rates from acuity and the market basket will more than offset the higher costs associated with higher acuity patients, the elimination of concurrent therapy, and the impact of the Part B MPPR. The company also looks to continue its Rehab Recovery Suite build out, by looking to add 600 new beds representing growth of more than 30%. We are raising our '10/'11/'12 EPS estimates to $2.62/$1.40/$1.50 from the previous $2.50/$1.38/$1.48. Additionally, we are moving our '10/'11/'12 EBITDAR estimates to $251.0/$263.4/$274.3mm from the previous $247.4/$255.9/$265.0mm" Shares of SUNH gained 30 cents yesterday to close at $13.60.