UPDATE: Citi Raises Sun Healthcare Group PT

According to a research report published today, Citi has increased Sun Healthcare Group's SUNH PT from $3 to $4 to reflect an increase in estimates. “However, we retain our Sell (3H) rating because we believe slower capital spending and Medicare sequestration cuts will limit EBITDAR growth in 2013. At 5.5x proforma trailing net debt/EBITDAR, we still see the balance sheet as poorly positioned to withstand any additional reimbursement cuts that could arise from the January 2013 debt ceiling debate. Nursing homes do not have commensurate upside from HC Reform's coverage expansion to balance against any incremental reimbursement risk. With a better understanding of SUNH's mitigation efforts, we are raising our 12-month price target from $3 to $4,” Citi commented in the report. Sun Healthcare Group closed yesterday at $4.55.