Radiation Therapy Services downgraded to "sell"

01/23/06 - Banc of America

NEW YORK, January 23 (newratings.com) - Analyst Gary Taylor of Banc of America Securities downgrades Radiation Therapy Services (RTSX) from "neutral" to "sell." The target price is set to $22.

In a research note published on January 20, the analyst mentions that the downgrade in the rating is based on valuation. The company’s share price does not reflect the risk of a cut in the Medicare (MDCR) reimbursement for freestanding IMRT (Intensity Modulated Radiation Therapy) cancer treatment in the near future, which is currently being reimbursed at a 116% premium to the corresponding hospital rates, the analyst says. According to Banc of America Securities, Radiation Therapy Services’ EPS is expected to be affected by 40%-50% in the near future if the MDCR reimbursement for IMRT is made in-line with the hospital rates.