Markets & Finance

Stifel Nicolaus Upgrades Medcath

Stifel Nicolaus upgraded Medcath (MDTH) to hold from sell.

Analyst Robert Hawkins says he believes the hospital industry will successfully petition CMS for a delay or multi-year transition in a proposed IPPS rule that would cut reimbursements.

While he cautions that a higher cut is possible, he upgrades because lifting of the specialty hospital moratorium increases the potential to develop additional joint ventures; a longer transition period gives the company time to convert from cardiac hospitals to acute care hospitals; it cuts to several cardio drugs likely to be lessened; and new senior operating team appears to be achieving fundamental improvements.

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