Rhoen-Klinikum Climbs After MainFirst Upgrade: Frankfurt Mover

Rhoen-Klinikum AG rose for the third day as MainFirst Bank AG said it expects a successful turnaround at the German hospital chain to boost profitability starting next year.

The shares rose as much as 4.3 percent, the biggest intraday climb since Sept. 21, and traded up 1.9 percent to 16.03 euros, the highest since Aug. 31 at 1:32 p.m. in Frankfurt. Volume was almost twice the three-month daily average.

New management has the ability to advance profits in older Rhoen-Klinikum hospitals and improve the private hospital operator’s free cashflow generation in the mid-term, Marcus Wieprecht, a Frankfurt-based analyst for MainFirst, wrote in a note to investors today. He raised his recommendation on the shares to outperform from underperform.

Rhoen-Klinikum is reviewing its portfolio and studying where it will find growth in the next five to 10 years, Chief Financial Officer Jens-Peter Neumann told reporters on Jan. 24. Neumann and Chief Executive Officer Martin Siebert were hired in November to reorient the company after Fresenius SE failed to win enough shareholder support for its 3.1 billion-euro ($4.1 billion) bid for Bad Neustadt An Der Saale, Germany-based Rhoen-Klinikum.

Although the company’s shareholder structure “continues to appear deadlocked, we believe that there is a reasonable M&A option value implied here,” Wieprecht said.

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