UPDATE: Bank of America Upgrades Molina Healthcare to Neutral on Stronger Revenue Trajectory

Bank of America raised its rating on Molina Healthcare

from Underperform to Neutral and raised its price objective from $23 to $29. Bank of America commented, "We are upgrading MOH shares to Neutral (from Underperform) with a view that companies with Medicaid exposure should benefit from coverage expansions outlined in health care reform legislation. Specifically, the market is likely to refocus on revenue growth driven by states transitioning existing beneficiaries to HMOs (from unmanaged fee for service), dual eligible demonstrations and program enrollment that could increase 20% starting in 2014 as projected by the CBO. We are raising our P.O. to $29 (from $23) on P/E multiple expansion." Molina Healthcare closed at $26.62 on Tuesday.