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Investing.com - JPMorgan has downgraded Regis (NASDAQ:RGS) Healthcare Ltd (ASX:REG) from Overweight to Neutral while raising its price target to AUD8.00 from AUD7.10.
The rating change comes as JPMorgan notes that operating conditions in the aged care sector have stabilized, with Regis increasingly resembling an infrastructure provider in a highly regulated but supply-constrained industry.
JPMorgan expects Regis to continue pursuing acquisitions to support growth and to increase its building plans, but believes this positive outlook is largely reflected in the current share price, which has risen more than 90% over the last 12 months.
The firm has adjusted its forecasts to account for Regis’s recent Rockpool acquisition and to allow for the delay to the Aged Care Act implementation, resulting in earnings upgrades that boosted the price target.
Despite the higher price target, JPMorgan downgraded its rating to Neutral due to limited upside potential from current levels.
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