UPDATE: Morgan Stanley Initiates Coverage on WellCare Health Plans with Underweight Rating, $73 PT on Less Favorable Risk-Reward Profile

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

with an Underweight rating and $73.00 price target. In the report, Morgan Stanley noted, “WCG will benefit long-term from Medicaid growth including expansion lives, duals, and new RFPs as well as Medicare Advantage growth. However, (1) reform implementation, (2) heightened industry competition, and (3) integration of recent acquisitions increase operational risk. Relatively high exposure to MA funding gap, particularly among pure-play Medicaid MCOs. Less favorable risk-reward.” WellCare Health Plans closed on Wednesday at $70.76.