Deutsche Banke Maintains a 'Hold' on Health Net (HNT); Raises PT & Estimates

November 24, 2009 7:20 AM EST

Deutsche Banke maintains a 'Hold' on Health Net (NYSE: HNT), raises price target from $17 to $21.

Deutsche analyst says, "We visited with HNT's management in Los Angeles on 11/18. The meeting had an upbeat tone since the company had just learned that the GAO upheld their protest of the loss of the Tricare contract to Aetna. Given the appearance of a conflict of interest with AET's hiring of a former senior Tricare official prior to the bid, we see favorable odds that HNT could end up retaining the contract. This is not a small matter for HNT given that Tricare is the company's most consistent business. Raise PT although maintain Hold rating based on execution risks...We also raise our 2010-11 EPS estimates to (from) $2.25 ($2.20) and $2.16 ($2.10), respectively. To arrive at our 12-month price target we assign a 9.3x multiple to our 2010 forecast...Upside risks to our PT include Tricare contract retention or further industry consolidation."

To see all the upgrades/downgrades on shares of HNT, visit our Analyst Ratings page.

Health Net, Inc. (Health Net) is an integrated managed care organization that delivers managed healthcare services through health plans and government-sponsored, managed-care plans.

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