Market Overview

KeyBanc Initiates Magellan At Sector Weight

KeyBanc Initiates Magellan At Sector Weight

KeyBanc analysts believe Magellan Health Inc (NASDAQ: MGLN)'s dearth of experience in handling Medicaid populations will likely take away from the company's ability to win state procurement from more seasoned competitors. Thus, the bank initiated coverage on Magellan Thursday with a Sector Weight rating. No price target was set.

Adding to the analysts' concerns were declining operating margins, which they attributed to contract losses, and rising competitiveness. New businesses have produced lower profitability also.

Related Link: In Wake Of Orlando Shooting, Here Are Some Positive Business Responses

On the bright side, those new products, combined with recent acquisitions, have helped the company's pharmacy segment to drive top-line growth. Low net debt levels and cash flow generation could result in continued buybacks and more acquisitions.

KeyBanc still takes a cautious view, however. Although intrigued by Magellan's strong capital position and the pharmacy segment growth, until the likelihood of winning Medicaid contracts seems to improve, KeyBanc will stay on the sidelines.

Latest Ratings for MGLN

Feb 2019Initiates Coverage OnBuy
Jan 2019Initiates Coverage OnEqual-Weight
Nov 2018DowngradesOutperformMarket Perform

View More Analyst Ratings for MGLN
View the Latest Analyst Ratings

Posted-In: KeyBanc MedicaidAnalyst Color Long Ideas Initiation Analyst Ratings Trading Ideas


Related Articles (MGLN)

View Comments and Join the Discussion!

Humble Battery Leads Charge Towards Green Energy And Smart Grids

Jefferies Mostly Neutral On REIT Sector