Wedbush Raises Price Target on Centene (CNC), Q2 Looks Healthy for Growth
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Price: $67.47 +2.17%
Rating Summary:
19 Buy, 16 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
19 Buy, 16 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush is reiterating its Outperform rating on shares of Centene (NYSE: CNC) and is raising its price target by $1 to $39.
The price target increase reflects that $0.21 increase in the firms 2012 EPS estimate, which in tail is due to the recent Medicaid Expansion win in Kentucky. Wedbush believes that the win could add $0.17-$0.25 on an annualized basis.
The contract should add roughly 180-190 thousand new members and should begin on October 1. The firm is forecasting margins of 2-3 percent over the first 2-3 quarters.
An analyst at the firm comments, "Heading into 2Q11, we see upside from lower utilization and declining startup costs. We also have confidence in the company’s claims clarity and rapid response to outliers and see further upside potential from robust medical management. The company’s Hybrid product is another potential longer term driver of upside as our recent survey of state DOI’s indicated that 21 states are considering continuity of care language in establishing health insurance exchanges"
The firm's current Q1 and 2012 EPS estimates are $0.58 and $2.68. Wedbush also raised its 2012 revenue estimate from $5.407 billion to $5.76 billion.
For more ratings news on Centene click here and for the rating history of Centene click here.
Shares of Centene closed at $36.37 yesterday.
The price target increase reflects that $0.21 increase in the firms 2012 EPS estimate, which in tail is due to the recent Medicaid Expansion win in Kentucky. Wedbush believes that the win could add $0.17-$0.25 on an annualized basis.
The contract should add roughly 180-190 thousand new members and should begin on October 1. The firm is forecasting margins of 2-3 percent over the first 2-3 quarters.
An analyst at the firm comments, "Heading into 2Q11, we see upside from lower utilization and declining startup costs. We also have confidence in the company’s claims clarity and rapid response to outliers and see further upside potential from robust medical management. The company’s Hybrid product is another potential longer term driver of upside as our recent survey of state DOI’s indicated that 21 states are considering continuity of care language in establishing health insurance exchanges"
The firm's current Q1 and 2012 EPS estimates are $0.58 and $2.68. Wedbush also raised its 2012 revenue estimate from $5.407 billion to $5.76 billion.
For more ratings news on Centene click here and for the rating history of Centene click here.
Shares of Centene closed at $36.37 yesterday.
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