UPDATE: Bank of America Upgrades Amerigroup to Buy, Raises PT to $81

Bank of America raises its rating on Amerigroup

to Buy from Neutral and raises its price target to $81 on Medicaid growth trajectory and sustainable margin scenarios through 2014. Bank of America says, "The market knows AGP enjoys significant revenue growth potential based on its strong track record in RFPs, but it could wind up best positioned for the $300 billion dual eligible opportunity too. ...AGP often competes against smaller inefficient plans where rates are set based on the average market cost trend, and its low cost structure generates sustainably higher returns. Specifically, we believe AGP's sustainable profit margin is 2.6-2.9%, which is 50% better than CNC's, for example." AGP closed at $70.46 per share on Thursday.