May 15 (Reuters) - Robert W Baird upgraded Amedisys Inc and Gentiva Health Services Inc to “neutral” from “underperform,” lauding the home health providers’ efforts to cut costs.
Shares of Gentiva jumped 14 percent to a high of $7.28, while those of Amedisys rose as much as 11 percent to $11.32 on Tuesday on the Nasdaq.
“We under-estimated the ability of home health providers to take out costs,” analyst Whit Mayo said.
“(That) plus a material sell-off in the stocks are the two primary factors prompting this upgrade,” he said.
Shares in Gentiva have fallen 23 percent since the start of this month excluding their gains on Tuesday, while Amedisys’ stock has lost nearly a third of its value over the same period.
Home health providers -- Gentiva, Amedisys, LHC Group and Almost Family -- have suffered a series of recent setbacks, including reimbursement cuts, new Medicare regulations and federal probes into billing practices.
Amedisys, which posted a lower quarterly profit last week, indicated that it would struggle to offset the impact of changes in Medicare reimbursement rates.