Jefferies Remains Bullish on Magellan Health (MGLN) Following NDR
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Jefferies reiterated a Buy rating and $78.00 price target on Magellan Health Services (NASDAQ: MGLN) after spending time with management. MGLN's 3Q beat and raise helped alleviate concerns of the steeper than usual 2H earnings ramp. MGLN is expected to issues formal 2017 guidance in a week and Jefferies believes that a $315mm EBITDA projection is conservative.
Analyst David Styblo commented, "We reiterate our Buy rating following an NDR with CEO Barry Smith. Meetings increased visibility on several topics including the pipeline, client retention, and ACA risk. Our projections are conservative and don't include upside from Virginia MLTSS, which would add ~10 points of revenue growth. Despite this month's share price surge, we think MGLN is still undervalued (~20% upside) per our SOTP on Chart 1."
Shares of Magellan Health Services closed at $65.45 yesterday.
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