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Bank of America Reiterates Buy on Molina Healthcare Following Assumption of New Mexico Medicaid Contract

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In a report published Friday, Bank of America analyst Kevin Fischbeck reiterated a Buy rating and $41.00 price target on Molina Healthcare (NYSE: MOH).

In the report, Bank of America noted, “On 7/3/13 MOH announced it had entered an agreement to assume Lovelace Community Health Plan's New Mexico Medicaid managed care contract covering 84k residents, in a transaction we estimate could add 2-4% to EPS over time. Lovelace was not selected to participate in New Mexico's Centennial Care program and appears to have elected to transition the membership to MOH a few months before their current contract expires. MOH anticipates completing the transaction on 8/1/13. MOH was already the second largest Managed Medicaid company in the state with 91k enrollees, and this agreement will bring in line with Presbyterian Health Plan, the market leader. MOH should be able to leverage its existing infrastructure and SG&A in the state to help boost profit margins.”

Molina Healthcare closed on Wednesday at $37.81.

Latest Ratings for MOH

Aug 2017Morgan StanleyUpgradesUnderweightOverweight
Jul 2017Bank of AmericaMaintainsUnderperform
Jun 2017Morgan StanleyInitiates Coverage OnUnderweight

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Posted-In: Bank of America Kevin FischbeckAnalyst Color Reiteration Analyst Ratings


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