UPDATE: Citigroup Maintains Magellan Health Services at Buy Post Contract Loss

Citigroup reiterated Magellan Health Services

at Buy with a $58 price target. Citigroup noted, "On Monday, Magellan announced the loss of its contract with Horizon Blue Cross Blue Shield in New Jersey — We estimate this contract will generate $193 million in revenue in 2012, and assuming an average segment margin, around $30 million in EBITDA, or $0.65 per share. The current contract doesn't end until December 31, 2013, so Magellan's earnings won't be pressured until 2014. … EBITDA growth in 2014 is still possible, but it will require both the retention of the Maricopa business and a meaningful new contract win." Magellan Health Services closed at $49.79 on Friday.