Wedbush Cuts Price Target & Estimates on Molina Healthcare (MOH), Factors in Stock Split, Sees 5-7% Margins in a Few Years
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Price: $212.43 +3.27%
Rating Summary:
11 Buy, 19 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
11 Buy, 19 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush is maintaining its Outperform rating on shares of Molina Healthcare (NYSE: MOH), but is lowering its price target from $45 to $30 due to the 3 for 2 stock split.
The firm is lowering its FY11 and FY12 EPS estimates from $2.41 and $2.52 to $1.63 and $1.70.
Wedbush believes that the company is well positioned going into some of the upcoming RFPs as it is a new or recent entrant in a number of cases. It notes that $0.40-0.57 upside from potential new Medicaid contract wins appears reasonable.
Due to improvements in core operations and a positive mix shift in margins from the growing MIS segment which generate margins between 15-20 percent, the firm forecasts that margins will be in the range of 5-7 percent in the net few years, up from the mid 2 percent range now.
With MOH being the only Medicaid pure play with captive clinics, the firm believes that this will become more important as exposure to the ABD population grows. The company is expected to open three new CA clinics in 2011, each of which may serve around 2.7 thousand members.
For more ratings news on Molina Healthcare click here and for the rating history of Molina Healthcare click here.
Shares of Molina Healthcare closed at $25.69 yesterday.
The firm is lowering its FY11 and FY12 EPS estimates from $2.41 and $2.52 to $1.63 and $1.70.
Wedbush believes that the company is well positioned going into some of the upcoming RFPs as it is a new or recent entrant in a number of cases. It notes that $0.40-0.57 upside from potential new Medicaid contract wins appears reasonable.
Due to improvements in core operations and a positive mix shift in margins from the growing MIS segment which generate margins between 15-20 percent, the firm forecasts that margins will be in the range of 5-7 percent in the net few years, up from the mid 2 percent range now.
With MOH being the only Medicaid pure play with captive clinics, the firm believes that this will become more important as exposure to the ABD population grows. The company is expected to open three new CA clinics in 2011, each of which may serve around 2.7 thousand members.
For more ratings news on Molina Healthcare click here and for the rating history of Molina Healthcare click here.
Shares of Molina Healthcare closed at $25.69 yesterday.
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