GEN - Genesis Healthcare downgraded at Credit Suisse citing external pressures

Genesis Healthcare (GEN) is downgraded at Credit Suisse to underperform from neutral as the analysts note that the factors critical for the company’s recovery are uncertain and beyond the company’s control.The target price is unchanged at $0.57, a discount of ~20.8% to Friday’s close.The analysts highlight three factors important for the company’s recovery: occupancy rebound, government aid, and rent relief from REITs.Noting that Genesis requires a mid-80’s level of occupancy to breakeven in terms of cash flows, the analyst A.J. Rice and the team expect the occupancy to rebound slowly from 76.5% seen in October. Despite the ongoing vaccinations, the analysts predict an uncertain reversal to the pandemic-driven shift to homecare.With the company calling for further government funds to remain as a going concern, the analysts argue ‘there is no quick fix to the current situation,’ citing the recent retirement of the long-time CEO George V. Hager.

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Genesis Healthcare downgraded at Credit Suisse citing external pressures