S&P Capital IQ Reiterates its BUY Rating on Aetna

October 28 00:00 2011

NEW YORK, October 28 (RainbowNewsLine.com) – Analyst Phillip Seligman of S&P Capital IQ reiterates his BUY rating on the shares of Aetna (NYSE:AET), while raising his estimates for the company. The target price is set to $49.

Analyst Phillip Seligman, in a research note published yesterday,  mentions that company posted its Q3 operating EPS ahead of estimates and the consensus. The company reported a 1% drop in operating revenues due to fewer medical members. A 290 bps drop was seen in the medical loss ratio, which was better than expected due to controlled medical costs and favorable claim reserves, the analyst says. The analyst believes that Aetna will respond to health reform challenges better than most insurers, because of its scale, growing diversity, IT developments, and program designs. The EPS estimates for 2011 and 2012 have been raised from $4.75 to $5.00 and from $4.80 to $4.85, respectively.

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