Bank of America: Coventry Health Care's Q4 and 2012 Guidance In-Line
In a recent research report released today, Bank of America says Coventry Health Care (NYSE: CVH) reported EPS of $0.06, $0.03 lower than consensus.
“The miss was driven by a higher tax rate (-$0.04), as EBITDA was largely in-line as a higher than expected MLR (-$0.06) and lower service revenue ($-0.04) was offset by better than expected SG&A (+$0.10). More importantly, CVH provided 2012 EPS guidance of $3.10-3.30 (vs. consensus of $3.27) after providing initial guidance on 1/17 that 2012 EPS would be greater than $3.00. Overall, after adjusting for the MA PFFS run out and the higher tax rate, we view the quarter and the guidance as inline. Our view remains that there is upside to estimates as CVH deploys its ~$900m cash hoard (20% of market cap),” Bank of America said in the report.
Bank of America maintains its Buy rating and $39 PT on Coventry Health Care, which is currently trading at $30.40.
