Shares of cardiovascular-healthcare provider MedCath Corp. (MDTH) soared to a new six-month high of $12.10 on Thursday's regular trading as analysts at Deutsche Bank upgraded the company's shares to 'Buy' rating from 'Hold.' MedCath shares began trading at $10.10 on Thursday and climbed steadily to $12.16, before easing to the current $12.
Deutsche Bank analysts said MedCath's decision to pursue strategic alternatives opens up the door for local strategic buyers to acquire individual hospitals opportunistically and at attractive valuations relative to all-in costs associated with construction/start-up.
Analysts said in-depth review of MedCath portfolio suggests all of its nine remaining hospitals have viable strategic local buyers. These buyers could move faster than current expectations to consummate deals. As such, MedCath's process should create value, and we believe the situation is compelling enough to get involved, analysts stated.
Even though MedCath was unable to achieve proper value as an owner-operator, the company has proved its success as a seller of assets to local strategic buyers. This pattern is likely to repeat as MedCath's strategic review process plays out, analysts noted.
Analysts updated their valuation of MedCath to $17 from $9 based on a break-up analysis of the company. "Our analysis points to a valuation range between $12 and $23 per share...Our valuation is now in-line with other hospital companies, but multiple expansion from current 5x EV/EBITDA is underpinned by our belief that MDTH will successfully execute on a series of asset sales to break-up the company," analysts said.
Analysts believe prolonged and/or unsuccessful strategic review process would be the key risks associated with the process.
MDTH is currently gaining $2.53 or 26.72%, and is trading at $12 on a volume of 1.47 million shares on Nasdaq.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.