UPDATE: BMO Capital Markets Upgrades Health Net to Market Perform with $23 PT

BMO Capital Markets upgraded Health Net Inc.

from Underperform to Market Perform and raised the price target from $17 to $23. BMO Capital Markets noted, "we are upgrading the shares of Health Net based on the improved visibility around Medi-Cal contracting. While developing a risk corridor for the state-sponsored business will not shield the company from catastrophic loss, the mechanism should smooth results, providing better quarterly visibility to earnings. We have held an UNDERPERFORM rating based on lack of visibility into Medi-Cal and commercial earnings. Third-quarter commercial results were free from the drag of adverse development, a positive for the operations. The risk sharing arrangement created in California limits the near-term downside to earnings for Health Net. All of this leads us to upgrade the shares to MARKET PERFORM." Health Net closed at $25.84 on Wednesday.