German bank Berenberg has double-downgraded its recommendation on Spire Healthcare Group PLC to ‘sell’ from ‘buy' due to concerns over its cost base and the likelihood of a turnaround in its fortunes over the short-term.
Berenberg also slashed Spire’s target price to 120p from 290p.
Earlier this week, shares in the FTSE 250-listed firm hit an all-time low after the company warned it expected to report “materially lower” 2018 profits due to lower referrals from Britain’s National Health Service (NHS).
“Monday’s profit warning means we now have even less certainty of a near-term improvement in Spire’s fortunes. Given that guidance was reiterated 10 weeks ago, operations have clearly taken a marked turn for the worse, and the lack of new guidance indicates that management is currently unable to forecast its own business,” analysts at Berenberg said in a note to clients.
Shares in Spire were down 6.3% at 177.50p in mid-morning trade.