On June 4, Zacks Investment Research upgraded U.S. health
) to Zacks Rank #2 (Buy) from Zacks Rank #3 (Hold).
Why the Upgrade?
Aetna has been enjoying rising estimate revisions in the past 60
days with 10 of 15 estimates revised upward. This positive estimate
revisions led to a 1.9% rise in the Zacks Consensus Estimate to
$6.52 per share for 2014.The same for 2015 rose 1.1% to $7.20 as 9
out of 16 estimates moved north.
Unfazed by numerous challenges related to the Health Care Reform
Act that stifled the health insurance industry, this insurer has
been performing strongly. Aetna's stock has in fact rallied 16.4%
year to date.
Aetna churned out first-quarter earnings of $1.98 per share,
zooming past the Zacks Consensus Estimate of $1.56 per share.
Earnings also grew 27% year over year. Better-than-expected
earnings came on the back of higher underwriting margins in the
Health Care business and accretion from the Coventry acquisition.
Buoyed by solid first-quarter results and expectations of continued
momentum, management increased its previously provided outlook for
the full year. Aetna now expects to earn in the range of $6.35 to
$6.55. The Zacks Consensus Estimate lies near the top end of the
guidance. The company had earlier announced a minimum of $6.25 per
share in earnings for 2014. Top line is expected to fall in the
range of $56 billion to $57 billion, which is higher than the
previous expectation of $54 billion.
Aetna is one of the biggest health insurers in the U.S. which has
proactively adapted to the changing industry landscape. Extensive
investments in products and technology, with an intention to extend
its core health business and capitalize on exciting new consumer
and provider opportunities emerging in the marketplace will
certainly help it to stay it ahead of its ilk.
Among other players,
Select Medical Holdings Corporation
Triple-S Management Corporation
) with a Zacks Rank #1 (Strong Buy) and
WellCare Health Plans, Inc.
) with a Zacks Rank #2 are also worth considering.
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AETNA INC-NEW (AET): Free Stock Analysis Report
WELLCARE HEALTH (WCG): Free Stock Analysis
SELECT MEDICAL (SEM): Free Stock Analysis
TRIPLE-S MGMT-B (GTS): Free Stock Analysis
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