Barclays Maintains an 'Equalweight' on WellCare Health Plans (WCG); Upside and Outlook Driven by Favorable Development; But Guidance Will Be Conservative

Barclays maintains an 'Equalweight' on WellCare Health Plans (NYSE: WCG) price target of $56.00.

Barclays analyst says, "With the quarter, we are boosting our 2011 EPS estimates but maintaining our 2012 EPS estimate, and raising our price target. Specifically, our 2011 EPS estimate goes to $5.60, up from $4.80, which is now the midpoint of management's updated guidance range of $5.55-$5.65. This estimate is driven by the unusually high levels of favorable development experienced in the quarter. Next, we maintain our 2012 EPS estimate of $3.90, which represents growth of roughly 15% over our 2011 EPS estimate when excluding the $2.20 benefit from favorable development realized through the first nine months of the year. Lastly, we increase our price target to $56, which represents a target multiple of 10.0x our 2011 EPS estimate and 14.4x our 2012 EPS estimate. Our target was previously based on 10.8x our old 2011 EPS estimate, and 13.3x our old 2012 EPS estimate."

For more ratings news on WellCare Health Plans click here and for the rating history of WellCare Health Plans click here.

Shares of WellCare Health Plans closed at $52.94 yesterday.

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