Foothill Ranch-based Skilled Healthcare Group Inc. was downgraded Tuesday by an analyst who said the nursing home company’s stock now trades about where it should.
Skilled shares shot up 25% last week after the company agreed to pay $50 million to settle a class-action lawsuit over staffing levels in 22 California nursing homes.
The settlement came some two months after a Humboldt County jury had awarded the plaintiffs a $677 million judgment that could have bankrupted Skilled.
Analyst Arthur Henderson of Jefferies & Co., a Stamford, Conn.-based investment bank, said in a research note that Skilled’s shares, which have rose 20% in the week since the settlement was announced, now are reasonably valued.
Henderson cut his rating on Skilled to “hold” from “buy.” He said he expected the stock to trade around its current price and was positive on its long-term outlook.
Skilled shares closed down 6% in Tuesday New York trading with a market value of $160 million.
