Goldman Sachs Cuts Opinion On Universal Health
Goldman Sachs downgraded its investment opinion on Universal Health Services (UHS ) to underperform from in-line this Wednesday, citing Hurricane Katrina's impact on the health center operator.
Analyst Timothy Leahy said the public hospital industry has had a significant amount of financial exposure to the Gulf Coast region, which is presently recovering from Hurricane Katrina. Leahy expects some operators' earnings in the second half of this year to be meaningfully impaired as local economies struggle to recover. Leahy estimates that Universal Health and Tenet Healthcare (THC ) have the greatest exposure to damage at 10% and 7% of acute care beds, respectively. While insurance payments are likely to offset some of the companies' losses, Leahy is cutting his third quarter and fourth quarter earnings per share estimates for both, while downgrading only Universal.