Goldman Lifts Targets on Managed Care Stocks Following WLP/AGP Deal (CNC) (MOH) (WCG) (more...)

Analysts at Goldman Sachs revised price targets for stocks in the Managed Care sector Wednesday morning following WellPoint's (NYSE: WLP) $4.9 billion deal with Amerigroup (NYSE: AGP) on Monday. The firm's Matthew Borsch and Sam Wass believe there will be further consolidation, "which reflects the push by the larger ‘diversified’ managed care names to broaden exposure to public sector managed care growth opportunities." The analysts also suggested "the scope of public sector managed care expansion, particularly as it relates to management of the $300 bn annual ‘dual eligible’ spending, will be a factor driving the small-to-mid cap names towards larger partners."

While the Goldman analysts raised their targets on Centene (NYSE: CNC) and Molina Health (NYSE: MOH) by the most among the group, they said they continue to prefer "special situations" WellCare (NYSE: WCG), HealthNet (NYSE: HNT) and Coventry (NYSE: CVH).

Goldman remains Neutral on the sector as a whole.

The following price target raises were made:

• Centene - from $32 to $39
  
• Molina - from $25 to $29
  
• Coventry - from $35 to $36
  
• WellCare - from $76 to $77
  
• UnitedHealth (NYSE: UNH) - from $60 to $61
  
• Universal American (NYSE: UAM) - from $11 to $12

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