Leerink downgrades Acadia Healthcare on ‘real risk’ of legal liabilities

As previously reported, Leerink downgraded Acadia Healthcare (ACHC) to Market Perform from Outperform with a price target of $14, down from $25. Each time Acadia reports earnings, more challenges emerge along with a continued deterioration in earnings, the analyst tells investors in a research note. Leerink says the size of the earnings guide-down from higher medical malpractice spending is surprising. The company’s operations continue to worsen, there’s “real risk” to its future legal liabilities, and its free cash flow is deteriorating contends Leerink. “We can no longer recommend this stock,” the firm adds.