Leerink Partners Raises Price Target on Molina Healthcare (MOH) to $97 Following Investor Day

Leerink Partners reiterated an Outperform rating on Molina Healthcare (NYSE: MOH), and raised the price target to $97.00 (from $95.00), following its bi-annual investor day. Management did not update guidance for 2015. 2015 revenues on the positive are expected to be in line, with medical cost coming in better than expected, offset by pressure on G&A ratio and higher share count.

Analyst Ana Gupte commented, "MOH (OP) held its bi-annual Investor Day in NY on Sep 17. Consistent with prior years, management did not update guidance for 2015. 2015 revenues on the positive are expected to be in line, with medical cost coming in better than expected, offset by pressure on G&A ratio and higher share count. We see 2015 consensus as achievable with potential for modest upside from FL rate update (expected in Oct), TX Quality revenue recognition and HIPF (Health Insurance Providers Fee) reimbursement in MI & UT. 2016 continues to look directionally solid with MLR fears on Marketplaces overblown as we expected. FL rate upside remains a tailwind with the Providence deal offering upside along with other tuck-in acquisitions. Long term net margin target of 1.5% -2% by 2017 was reiterated. We maintain our 2015 & 2016 EPS estimates of $2.62 and $3.65 respectively as compared to consensus of $2.61 and $3.59. Our latest model incorporates the impact from convertible share count dilution and tax rate which is offset by improving MLR and G&A ratio. We reiterate our OP rating and raise our Price Target to $97 given continued top line growth from the secular Medicaid growth story and MOH specific margin expansion. Our PT represents a P/E of 31x on the average of our 2015E & 2016E EPS."

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

Shares of Molina Healthcare closed at $79.95 yesterday.

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