Update (9:45 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- Jefferies increased its target price on Aetna (AET) to $87 and set a "buy" rating. The firm cited tailwinds from Coventry accretion and buybacks as the reasons for the increase.
The stock was rising 0.82% to $74.19 at 9:42 a.m. on Friday.
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 robust revenue growth, solid stock price performance, growth in earnings per share and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 32.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 78.57% and other important driving factors, this stock has surged by 50.38% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, AETNA INC increased its bottom line by earning $5.35 versus $4.78 in the prior year. This year, the market expects an improvement in earnings ($6.34 versus $5.35).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 94.0% when compared to the same quarter one year prior, rising from $190.10 million to $368.90 million.
- The gross profit margin for AETNA INC is rather low; currently it is at 24.65%. Regardless of AET's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AET's net profit margin of 2.79% compares favorably to the industry average.
- You can view the full analysis from the report here: AET Ratings Report