By Senad Karaahmetovic
Universal Health Services (NYSE:UHS) shares are down over 3% today after BMO analyst Matt Borsch downgraded the company’s rating to 'Underperform' from 'Market Perform'.
The downgrade call comes as a result of “simultaneous pressures on the top and bottom lines that combine to reduce earnings growth this year (and probably next) and to a greater degree than currently implied in stock prices.”
The price target is also cut to $90 per share from the prior $133, implying a 14% downside risk from current levels. The lowered price target reflects slashed three-year fwd. revenue/earnings forecasts, which now sit below the current Street consensus.
Last week, UHS lowered its financial outlook, citing an “unfavorable” operating environment.
“While our model implies modest improvement after 2022, we think the risk is biased to the downside,” Borsch concluded.