Merrill Lynch downgraded Universal Health Services (UHS

) to neutral from buy.

Analyst A.J. Rice says he cut the company's rating to neutral buy after CFO Kirk Gorman said he would be leaving the comany. Rice says the news is likely to place a cloud over the stock until more information is known about his departure. He notes the company indicated that Gorman is leaving the company due to differences that surfaced between him and the company's independent auditors KPMG, and about the company's financial statements.

Rice says Gorman, along with CEO Alan Miller, has played a key role in telling the Universal Health story to the investment community over the past decade. He notes the Gorman news is overshadowing in-line fourth quarter results. He sees $3.11 2003 earnings per share (GAAP).