Select Medical initiated with a Neutral at UBS

UBS analyst AJ Rice initiated coverage of Select Medical with a Neutral rating and $26 price target. Select Medical’s critical illness recovery hospitals margins have room to improve by reducing agency labor utilization and commercial contract renegotiations, but the firm believes the risk/reward is balanced at current levels, the analyst tells investors in a research note. The recent move lower in the stock is mainly attributed to impact of rising long-term rates on Select’s highly levered capital structure and lower peer multiples, the firm says.