UPDATE: Credit Suisse Raises Target to $50 on Aetna
Credit Suisse maintains its Neutral rating on Aetna (NYSE: AET) and raises its price target by $1 to $50 on favorable capital deployment.
Credit Suisse says, ": We reforecast our model post 4Q11 earnings and increase our 2012-2013E EPS to $5.20 (+10c) and $5.55 (+15c), respectively. We also increase our PT to $50 (+$1). AET is well positioned in 2012 to deploy $1.35bn of cash at the parent on acquisitions and share repurchases. We could also see EPS upside if medical cost trends fail to rebound as AET priced 45% of member months by the end of 3Q11 when their forward view of cost trend was higher than the current outlook for 6.5% +/- 50bps. While AET continues to execute, and we recommend an overweight on Managed Care, we maintain a Neutral or benchmark weighting due to faster top-line growth at other MCO peers with more exposure to faster growing end-markets such as Medicare Advantage, Duals, and Medicaid."
AET closed at $45.07 a share yesterday.
