In a report published Monday, Citigroup reiterated its Buy rating and $58.00 price target on Magellan Health Services MGLN.
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.”
Magellan Health Services closed on Friday at $49.79.
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