We are reiterating our Outperform recommendation on
), reflecting our continued optimism about the company's growth
prospects and below-average health reform risks due to business
Aetna's business execution over the last few years has been
excellent. While performance has been strong across the board, a
stand-out area is its organic and acquisition-fueled growth.
Aetna has also made huge investment in technology upgradation.
Aetna recently concluded the acquisition of Coventry. The
acquisition has enhanced the company's Medicaid footprint, gives
it more credibility, and better positioned the company for the
enormous Medicaid RFP expansion and dual growth
It has also made a number of acquisitions in its Commercial
business over the past 2-3 years. At the same time, the company
is witnessing an increase in membership.
Aetna is also aggressively forming Accountable Care
Organizations to generate incremental revenues.
We view international growth opportunities at Aetna with
A strong balance sheet with an efficient capital management
program provides inherent strength.
This Zacks Rank #2 (Buy) health insurer has been witnessing an
increase in earnings estimate over the past 60 days. The Zacks
Consensus Estimate for 2013 increased 0.7% to $5.87 as 9 out of
14 estimates moved north. The same for 2014 rose 0.2% to $6.36 as
6 of 15 estimates were raised over the same time frame. The
expected long term earnings growth is 11.9%.
Other Stocks to Consider
United Health Group Inc.
Health Net, Inc.
) all with Zacks Rank #2 (Buy) are worth considering.
AETNA INC-NEW (AET): Free Stock Analysis
HEALTH NET INC (HNT): Free Stock Analysis
UNITEDHEALTH GP (UNH): Free Stock Analysis
WELLPOINT INC (WLP): Free Stock Analysis
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