boosted by credit suisse

0835 [Dow Jones] STOCK CALL: Healthscope (HSP.AU) boosted by Credit Suisse to Neutral from Underperform and target to A$5.00 from A$4.00 after updated profit forecasts, rolls forward valuation, while Morgan Stanley cuts target to A$3.60 from A$4.19 on capital raising dilution. The capital issue means the company can fund capex, MS says in a client note, while CS says the raising was needed for announced acquisition, sizable brownfields capex program and potential bolt-ons. CS expects continued operational improvement across both hospitals and pathology units. "Arguably, maintenance of a bulk-billing pathology model and deregulation of collection centers will allow HSP to compete in regions previously dominated by the larger incumbents: Primary Health (PRY.AU) and Sonic Healthcare (SHL.AU)," it says. MS keeps Equal-weight, prefers PRY with HSP trading at about 15.3x FY10 PE post issue, "putting it on a premium" to Ramsay Health (RHC.AU), PRY and SHL. HSP in trading halt, last at A$4.53. (ABH)