Citi Downgrading Community Health Systems To Hold

According to Citi, Community Health Systems (NYSE: CYH) is downgraded to Hold.

Citi said that after further analysis of 2-day stays and reimbursement coding it still sizes approximately 10% EPS risk from normalizing CYH's 1-day stay rates to national averages. “However, stepping back to consider the bigger picture raises new concern that underlying operations are likely to be impacted by a possible 2-3 yearlong investigation overhang. Our review of history suggests CYH same-store volumes could trail industry averages by 2% until the OIG investigation is resolved. By 2013, this could push our EBITDA and EPS ests 4-5% and 15% lower respectively before consideration of legal costs. We are lowering estimates materially today.”

Community Health Systems closed yesterday at $30.68.