Health Management Associates Raised To 'Buy' At Deutsche Bank
Thursday, January 19, 2022 12:47 PM

Deutsche Bank (DB) raised its rating on Health Management Associates Inc. (NYSE:HMA) to "Buy" from "Hold", while trimming price target on the stock to $8.50 from $9.50.

Darren Lehrich, an analyst at DB, said he considers the risk/reward on HMA shares to be tilted firmly to the upside in the wake of the recent sell-off.

"While hospital sector fundamentals remain challenged and investigations remain an important risk factor here, we believe the opportunity in HMA shares presents well at 5.3x EBITDA," Lehrich wrote in a note.

Lehrich said HMA’s pull-back is mostly related to concerns about the recent resignation of its general counsel, as well as uncertainty about the potential broadening in scope of its government investigations. "While we are less concerned about the circumstances of the general counsel’s resignation, we continue to believe that HMA’s two ongoing investigations could expand in scope," he added.

The stock, which has been trading in the 52-week range between $4.81 and $11.74, is currently trading 2.5 percent higher at $6.07.