Anthem (ANTM) Stock Rallied, CEO Reassured Investors Amid 'Obamacare' Concerns

Anthem (ANTM) stock closed higher today after the company addressed concern about the Affordable Care Act's exchanges after UnitedHealth (UNH) warned it might withdraw from them.
By Rachel Graf ,

NEW YORK (TheStreet) -- Anthem (ANTM) - Get Report stock closed up 2.67% to $131.27 in Friday's trading session, as the Indianapolis-based health insurer reassured investors after UnitedHealth Group (UNH) warned yesterday that it might withdraw from the Affordable Care Act's exchanges.

Anthem noted that its individual insurance businesses were in line with projections through October, and backed its full-year 2015 earnings expectations, Reuters reports.

Additionally, Leerink analyst Ana Gupte noted that any negativity from individual exchanges has been priced into the company's forecast, which she reaffirmed is in line with her expectations, Barron's reports. Gupte maintained her "outperform" rating on the stock. 

"As a leader during this time of unprecedented transformation in healthcare, Anthem remains committed to enhancing access to high quality, affordable healthcare for all of our members inside and outside of the insurance exchanges and continuing our dialogue with policymakers and regulators regarding how we can improve the stability of the individual market," Anthem CEO  Joseph R. Swedish said in a statement, adding that the company has offered more than 1,000 new insurance product choices since the launch of the exchanges.

Separately, TheStreet Ratings team rates ANTHEM INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate ANTHEM INC (ANTM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • ANTHEM INC has improved earnings per share by 9.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ANTHEM INC increased its bottom line by earning $8.95 versus $8.66 in the prior year. This year, the market expects an improvement in earnings ($10.20 versus $8.95).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 3.8% when compared to the same quarter one year prior, going from $630.90 million to $654.80 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.2%. Since the same quarter one year prior, revenues slightly increased by 7.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, ANTM has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
  • You can view the full analysis from the report here: ANTM

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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