UPDATE: Morgan Stanley Initiates Coverage on Humana with Equal-Weight Rating as Medicare Advantage will be Long-Term Growth Driver

In a report published Thursday, Morgan Stanley analyst Andrew Schenker initiated coverage on

with an Equal-Weight rating. In the report, Morgan Stanley noted, “Medicare Advantage will be a long-term growth driver for HUM. Strong positioning in individual exchanges should lead to enrollment growth. However, funding gaps in 2014 and 2015 will pressure margins and force HUM to find incremental offsets. Significant investments in 2014 to prepare for exchanges and Medicaid weigh on earnings but are not expected to persist.” Humana closed on Wednesday at $100.28.