UPDATE: Citi Initiates Coverage on Managed Care and HC Facilities (CI) (ANTM) (CNC) (UNH)

(Updated - October 2, 2015 11:33 AM EDT)

(Updated - October 2, 2015 11:33 AM EDT)

Citi initiated coverage on coverage of the Managed Care and HC Facilities space with a balanced view.

CIGNA (NYSE: CI) and Anthem (NYSE: ANTM) are Citi's tops picks. Centene (NYSE: CNC) and UnitedHealth Group (NYSE: UNH) were also initiated at Buy.

Community Health Systems (NYSE: CYH), HCA Holdings (NYSE: HCA), LifePoint Health (NASDAQ: LPNT), Tenet Healthcare (NYSE: THC) and Universal Health (NYSE: UHS) were initiated at Neutral.

Discussing managed care, Citi said, "We have a positive view of the managed care sector driven by our expectation for continued muted cost trend, disciplined pricing, M&A synergy opportunities, and reasonable valuation."

On hospitals, analysts said, "We have a more tempered view of the hospital sector as we give pause to sustainability of volume trends, upcoming difficult comps, and unease around potential bad debt creep. That said, we acknowledge pullback and will look to be more constructive if stocks continue to bleed and expectations further reset.

Discussing outsourcing, the report noted, "We have a favorable view of the physician outsourcing space as it’s positioned to capitalize on the hc systems drive for greater efficiencies, while operating in fragmented markets allowing for more M&A. Premium valuation has us waiting for buying opportunities."

For an analyst ratings summary and ratings history on CIGNA click here. For more ratings news on CIGNA click here.

Shares of CIGNA closed at $135.43 yesterday.

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