This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

WellPoint Still Glowing

WellPoint (WLP) has received a second, more favorable opinion of its 2006 guidance.

True, the company simply reiterated its outlook -- rather than raising it to meet lofty Wall Street expectations -- during its much-awaited investor day this week. But the company has a reputation for beating its own targets, so some experts on Wednesday chose to leave their own, more bullish views intact.

"Since we are paid to produce our best estimates and not simply repeat management statements, we will ignore this guidance," declared Prudential analyst David Shove. "We continue to believe that the synergies from the Anthem deal and the profitability of (Medicare) Part D will drive earnings to $4.80 in 2006. We reiterate our overweight rating for the shares."

Several other analysts viewed WellPoint's 2006 forecast, calling for operating profits of $4.69 a share, as conservative as well.

Patrick Hojlo of Credit Suisse First Boston pointed to history as a guide. Last year, he noted, WellPoint projected higher costs -- and ultimately, lower earnings -- than have materialized. Now, he suggests, the company seems even better positioned to capitalize on favorable industry trends and deliver additional upside going forward.

In the meantime, however, shares of WellPoint have taken a slight hit. The stock, which was trading near an all-time high ahead of this week's update, slipped 1.7% to $77.71 Wednesday.

But Hojlo wasn't necessarily surprised.

"When your stock is up 38% year-to-date -- and 120% over the past two years -- expectations can be hard to beat," he wrote on Tuesday. "The market may have wanted a little more from WLP today in the way of guidance. But ... (because of) our belief that the company will grow operating profit faster than the market currently expects -- 12% to 15% -- over the next three to five years, we are still confident buyers of the stock."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
MHS $70.30 0.00%
DE $90.46 0.01%
ESRX $84.28 -0.65%
UNH $114.79 0.85%
WLP $136.01 1.43%


DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs