LHC Group (NASDAQ:LHCG) Challenged by Pricing Environment

LHC Group (NASDAQ:LHCG) remains one of the stronger post–acute care companies, as they have a strong exposure to the rural market, but going forward they will be challenged by the current pricing market, along with uncertainty concerning regulatory scrutiny the overall industry is receiving.

FBR says, "LHC Group is one of the better positioned post–acute care companies due to its higher level of rural exposure; that positioning, however, is reflected in the premium valuation that LHCG shares receive relative to peers. While the company’s JV strategy and M&A activity add to its ability to grow volumes beyond that of the overall market, we still expect LHC Group to be challenged by the pricing environment. The company also has overhangs that are similar to its peers such as the SEC/SFC investigations, potential for rebasing in 2014, and increased regulatory scrutiny. But, we also believe that the company is in the midst of adopting point-of-care solutions, which could increase the efficiency and profitability of the company over the long term."

FBR Capital reiterates a "Market Perform" rating on LHC Group (LHCG), which closed Tuesday at $28.94, up $0.21, or 0.73 percent. FBR raised their price target on LHC from $25 to $28.