Citi Downgrades Rating, Lowers PT On SUNH To $12

Citi has downgraded its rating from Buy to Hold and has lowered its price target from $17 to $12 on Sun Healthcare Group SUNH. According to Citi, “We are lowering our investment rating on SUNH from Buy/High Risk (1H) to Hold/Speculative Risk (2S). Despite the recent sell-off in the shares from last Friday's F'12 Medicare proposal, we see balanced risk/reward at best over the next 12months. We have a high level of confidence in the quality and capabilities of SUNH management, but the specter of sizable a MDCR reimbursement cut materially diminishes our confidence and visibility for the nursing home sector at large.” SUNH closed yesterday at $11.59.