Cantor Fitzgerald Raises Molina Healthcare PT, Notes Uncertainty Surrounding Pending Acquisitions

• Molina Healthcare, Inc. MOH shares are up 37 percent year-to-date, and are trading close to their 52-week high of $82.37.
• Cantor Fitzgerald analyst Joseph D. France maintained a Hold rating on the company, while raising the price target from $60 to $65.
• Uncertainty surrounding the timing and the real impact of pending acquisitions need to be considered, France said.

Analyst Joseph D France mentioned that Molina Healthcare’s recent performance has been boosted by acquisitions, new mandates and improved margins in select markets. All these positive developments are largely reflected in the stock’s current valuation, France added.

At its Analyst Day, Molina Healthcare is expected to provide details of reimbursement and pending acquisitions. France expects Preferred and Integral deals to have a greater impact in 2016, while HealthPlus in Michigan is expected to impact the company’s 4Q15 results more than its performance in 3Q15.

The EPS (diluted) estimate for 2015 has been raised from $2.50 to $2.60. The company’s future performance may be restricted by growing complexity of the Medicaid managed care plans and uncertainty around the implementation of mandates and acquisitions.

France pointed out that Molina Healthcare generates more than $1 billion of its annual revenue from six states and thus faces the risk of renewal contracts being awarded to competing vendors.