Healthcare Services initiated with a Neutral at UBS

UBS initiated coverage of Healthcare Services with a Neutral rating and $11 price target. Healthcare Services’ client base has been financially challenged even before COVID as a number of skilled nursing facilities found themselves overleveraged in a difficult reimbursement environment, and the financial strain worsened during the pandemic as SNFs experienced significant pandemic-related occupancy declines, the analyst tells investors in a research note. Healthcare Services’ growth prospects are likely to be limited in the year ahead due to general labor market tightness and incremental regulation on staffing, and a broad recovery in the nursing home sector will likely be hard to achieve, the firm argues.