Molina (MOH) Q4 Results Strong but Flu-Related Costs Noticeably Absent

February 8, 2013 1:23 PM EST
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Price: $59.04 +0.68%

Rating Summary:
    7 Buy, 8 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Following the release of Q4 results the night before, shares of managed health provider Molina (NYSE: MOH) opened higher by roughly 9 percent on Friday. Molina easily topping EPS estimates, in part because of improved performance in Texas. While results were clearly strong, Deutsche Bank wondered about the impact of this year's intense flu sesson.

"The one puzzling element of the 4Q print was that MOH only booked $5 mln of incremental costs for the flu relative to last year's quarter. This keeps the door open for incremental [Medical Loss Ratio] pressure in 1Q13 particularly since most of MOH's key markets were exposed to intense levels of flu related activity in either 4Q12 or 1Q13," said analyst Scott Fidel.

Deutsche Bank described Molina as having "strong top-line growth offset by volatile margins and premium valuation".

Deutsche Bank has a Hold rating on Molina Healthcare with a modified price target of $27.00 (from $24.00).

For an analyst ratings summary and ratings history on Molina Healthcare (NYSE: MOH) click here. For more ratings news on Molina Healthcare click here.

Shares of Molina Healthcare closed at $28.87 yesterday.

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