NEW YORK (TheStreet) -- Shares of Aetna (AET) are rallying 3.52% to $132 as the U.S. health insurer is close to buying rival Humana  (HUM) - Get Report and a deal could be signed as early as this weekend, according to Bloomberg.

This week, Aetna made a formal bid in the form of cash and stock, although no agreement has been reached yet. While Humana received two offers from Aetna and Cigna (CI) - Get Report, Humana prefers Aetna's ofer, according to Bloomberg.

Humana has a market value of $30 billion, The Wall Street Journal noted. On Thursday, shares of Humana are jumping 7.4% to $197.87.

Another factor that helped move Aetna shares higher was the U.S. Supreme Court's ruling that federal subsidies are legal under the Affordable Care Act, also known as Obamacare.

In a 6-3 decision, the Court ruled that the U.S. government can provide subsidies to Americans living in states that did not set up their own health insurance exchanges through the ACA.

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

"We rate AETNA INC (AET) 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 attractive valuation levels. We feel its strengths outweigh the fact that the company shows low profit margins."

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

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 53.74% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AET should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • AETNA INC has improved earnings per share by 20.9% 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, AETNA INC increased its bottom line by earning $5.66 versus $5.35 in the prior year. This year, the market expects an improvement in earnings ($7.40 versus $5.66).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 16.8% when compared to the same quarter one year prior, going from $665.50 million to $777.50 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.0%. Since the same quarter one year prior, revenues slightly increased by 7.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • You can view the full analysis from the report here: AET Ratings Report