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 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.