Courtesy of Benzinga.
Health insurer Anthem Inc (NYSE: ANTM) is a multiregional powerhouse in commercial and Medicaid products, with an aggressive approach toward acquisitions and accretive deployment of capital, according to BMO Capital Markets.
The Analyst
Analyst Matt Borsch upgraded Anthem from Market Perform to Outperform and increased the price target from $275 to $290.
The Thesis
Anthem can further strengthen its local market share and achieve industry-leading growth thanks to $4 billion in annual pharmacy cost savings, Borsch said in a Monday note. (See the analyst’s track record here.)
Partnerships with other health plans such as non-Anthem Blue Cross plans are contributing to better earnings growth, the analyst said. New fee-based arrangements with health plans and other entities could also help, he said.
The health insurer holds the opportunity for further market share gains if it captures a “substantial share” of $80 billion in expected new Medicaid revenue, Borsch said.
“We also highlight optionality on several fronts including ‘upside only’ potential outcomes from pending litigation (ESRX and Cigna) as well as the eventual likelihood of consolidation of other Blue plans by Anthem as scale economics become increasingly important.”
The sell-side firm views the valuation of Anthem shares as attractive.
The Price Action
Anthem shares have gained about 8 percent year-to-date.
The stock was trading up 2.26 percent to $247.64 at the time of publication Monday.
Related Links:
Credit Suisse: Growing Enrollment, 2019 Tailwinds For Humana Justify Bullish Stance
7 Health Care Names Worth Owning In The Trump Age
Latest Ratings for ANTM
Date | Firm | Action | From | To |
---|---|---|---|---|
Jul 2018 | BMO Capital | Upgrades | Market Perform | Outperform |
Apr 2018 | Credit Suisse | Maintains | Outperform | Outperform |
Apr 2018 | Morgan Stanley | Maintains | Equal-Weight | Equal-Weight |
View More Analyst Ratings for ANTM
View the Latest Analyst Ratings
Posted-In: BMO Capital Markets Matt BorschAnalyst Color Upgrades Health Care Price Target Analyst Ratings General Best of Benzinga