UPDATE: Bank of America Upgrades Molina Healthcare to Buy on EPS Momentum

Bank of America upgraded Molina Healthcare MOH from Neutral to Buy and raised the price target from $33.00 to $41.00. Bank of America noted, "We are upgrading MOH shares to Buy (from Neutral) with a view that margin expansion achieved in 4Q12 is likely to continue going forward due to positive rate updates and as medical management initiatives gain more traction. This would be consistent with Medicaid industry precedent where periods of outperformance (or underperformance) come in bunches as cost trend accruals/expectations are revised favorably (or unfavorably) over a number of quarters. We raised our 2013-2014 EPS estimates with 4Q results and see risks to the upside." Molina Healthcare closed at $32.60 on Tuesday.