Shares of hospital operator MedCath Corp. dropped in Friday trading after an analyst said Wall Street expectations are far too high and downgraded the stock.
Deutsche Bank analyst Darren Lehrich lowered his rating on shares of the Charlotte, N.C., company to "Hold" from "Buy." He noted that MedCath has fallen short of analyst estimates in four of its last five quarters, and he expects the company to post a profit of 60 cents per share in fiscal 2009 -- well below the average of 79 cents per share reported by Thomson Reuters.
The company's fiscal year ends Sept. 30.
MedCath shares fell 43 cents, or 4.1 percent, to close at $10.01. MedCath stock has lost more than half its value since early February, when it peaked at $27. Lehrich lowered his price target to $12.50 per share from $14.
Lehrich said inpatient hospital admissions and surgical volumes were weak in December, and MedCath does business in a few markets that are facing particularly stiff economic challenges, like California and Arizona. He said MedCath may not meet his expectations if admissions and procedure trends stay weak.
In a telephone interview, MedCath President and Chief Executive Edward French said some patients have delayed elective procedures or visits to doctors because of economic concerns. However, he said that doesn't affect MedCath as much as its competitors, because MedCath gets most of its revenue from cardiac care.
He added that patients who put off treatment will still eventually seek treatment.
"We do expect that in '09, admissions might be a little softer than they would be otherwise," French said. "But I think that care deferred is just that."
via yahoo
Deutsche Bank analyst Darren Lehrich lowered his rating on shares of the Charlotte, N.C., company to "Hold" from "Buy." He noted that MedCath has fallen short of analyst estimates in four of its last five quarters, and he expects the company to post a profit of 60 cents per share in fiscal 2009 -- well below the average of 79 cents per share reported by Thomson Reuters.
The company's fiscal year ends Sept. 30.
MedCath shares fell 43 cents, or 4.1 percent, to close at $10.01. MedCath stock has lost more than half its value since early February, when it peaked at $27. Lehrich lowered his price target to $12.50 per share from $14.
Lehrich said inpatient hospital admissions and surgical volumes were weak in December, and MedCath does business in a few markets that are facing particularly stiff economic challenges, like California and Arizona. He said MedCath may not meet his expectations if admissions and procedure trends stay weak.
In a telephone interview, MedCath President and Chief Executive Edward French said some patients have delayed elective procedures or visits to doctors because of economic concerns. However, he said that doesn't affect MedCath as much as its competitors, because MedCath gets most of its revenue from cardiac care.
He added that patients who put off treatment will still eventually seek treatment.
"We do expect that in '09, admissions might be a little softer than they would be otherwise," French said. "But I think that care deferred is just that."
via yahoo
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