Oppenheimer Reiterates "Perform" Rating On UnitedHealth
November 22, 2011 12:42 PM
Following UnitedHealth's (NYSE: UNH) announcement that it will acquire closely held XL Health, Oppenheimer reiterated a “perform” rating on the stock with a $55 price target, which implies substantial upside from where the shares currently trade.
“We view the deal favorably as it strengthens UNH's foothold in the special needs plans market and provides a successful delivery care model for a population that has historically been difficult to serve,” Oppenheimer said in the note.
Terms of the UnitedHealth deal weren't disclosed, but the cash deal is expected to close in the first half of next year.
“XL targets an attractive growth market, and while it generated 2010 premiums of ~$1.3B, they are expected to exceed $2B in 2012,” according to Oppenheimer.
