Market Overview

Anthem-Cigna Deal Unlikely To Be Consummated, Says Stifel

Share:
Anthem-Cigna Deal Unlikely To Be Consummated, Says Stifel

The incoming presidential administration poses disruptive potential to the United States' current healthcare system. The uncertainty around the Affordable Care Act and recent tweets by President-elect Donald Trump about the downfall of Obamacare have led Stifel to downgrade shares of Anthem Inc (NYSE: ANTM) to Hold from a Buy rating.

Downgrade Justification

Stifel analyst justified their rating downgrade by citing regulatory concerns in the near and long term regarding the fate of the ACA as “next to guaranteed.” “Government (Medicaid) margins are normalizing downward at ANTM. We believe this, coupled with policy questions about fate of Medicaid/Medicaid expansion also need be considered,” said Stifel.

Analysts are expecting Donald Trump’s presidency to accelerate a new round of significant health system changes, dubbed Healthcare Reform v2.0. Anthem’s 2017 stock performance may be limited, according to Stifel.

“We have long held that a second version of reform to address healthcare costs/inefficiencies/inequities was all but assured, the question was when,” added Stifel.

Merger Doubt

The considerable uncertainties surrounding the industry do not bode well for the potential Anthem–Cigna Corporation (NYSE: CI) merger, for which Stifel gives a ~10 percent chance of success.

“Given the continued squabbling by managements, and then the often conflicting testimony, we believe the pending deal is not likely to be consummated,” Stifel commented. “As a result, ANTM will have to re-engage as a stand-alone MCO and its message may not be well received by the investment community.”

Stifel has a $155 price target on Anthem.

Latest Ratings for ANTM

DateFirmActionFromTo
Sep 2019MaintainsOverweight
Sep 2019Initiates Coverage OnBuy
Jul 2019MaintainsOverweight

View More Analyst Ratings for ANTM
View the Latest Analyst Ratings

Posted-In: Analyst Color M&A Downgrades Health Care Price Target Politics Analyst Ratings General Best of Benzinga

 

Related Articles (CI + ANTM)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
SNABairdMaintains165.0
FNDLoop CapitalMaintains46.0
JELDBairdMaintains20.0
INFYBairdMaintains12.0
FASTBairdMaintains37.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

All-Star Lineup Of Economists Shares 2017 Outlook

Voting Opens For Benzinga Global Fintech Awards