UPDATE: Citigroup Cuts PT to $37 on Coventry Health
Citigroup reiterates its Buy rating on Coventry Health (NYSE: CVH) following the company's 4Q results and cuts its price target to $37 from $41 on a revised valuation multiple that reflects positioning among peers.
Citigroup notes, "Coventry reported 4Q11 operating EPS of $0.58, ex $0.02 in EPS related to favorable run-out of the company's exited Medicare PFFS business. EPS was a $0.05 below our estimates and $0.06 below consensus. We are increasing our 2012 EPS projection by $0.20, to $3.35, and our 2013 EPS projection is up by $0.15, to $3.60, as guidance was better than we expected. However, we are cutting our target price to $37 from $41. Our target multiple is now closer to what we assume on other plans in the group, which seems reasonable considering Coventry's relative inability for EPS upside because of the minimum MLR caps."
CVH closed at $30.49 a share on Wednesday.
