UPDATE: Credit Suisse Assumes Coverage on Centene

In a report published Thursday, Credit Suisse analyst Chris Carter assumes coverage on Centene CNC at Outperform, raising its price target to $72.00 from $70.00. According to the report, CNC is a leading multistate MCO focused on gov't end markets. We fully expect CNC to capture its fair share of a significant industry-wide market opportunity of an estimated ~$500B+ across unmanaged Medicaid, Duals, and Exchanges, and note CNC has the highest hit rate amongst its peers in winning new contracts. “We believe CNC will be a net beneficiary of a secular trend toward privatization of gov't-managed healthcare,” the report noted. “As such, we model revenue growth in 2014-15 of +33% and +16% y/y. We also believe CNC has the better relative positioning of new business in 2014, based on lower exposure to riskier products (ACA expansion, Duals) and more experience in states where new products are being rolled out (Florida, Illinois). We also view CNC as an M&A target.” CNC closed Wednesday at $62.46.