NEW YORK (TheStreet) -- Aetna (AET) stock is gaining 0.7% to $94.84 in late morning market trading on Wednesday after Leerink Partners raised its price target to $110 from $103 and reaffirmed its "outperform" rating.
Leerink analysts increased Aetna's 2015 fiscal year revenue estimate to $64.45 billion from $62.66 billion, and maintained their 2015 fiscal year EPS at $7.30.
Aetna is expected to end 2015 with $800 million to $1 billion in parent cash for share repurchase, analysts said. According to the firm, the company's free-cash-flow yields of 8%, along with a medium-term growth of 7%, 6% and 9% in revenue, earnings and EPS, point to multiple expansion.
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Aetna is a diversified health care benefits companies, serving an estimated 46 million people with information and resources to help them in consultation with their health care professionals make better informed decisions about their health care.
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, impressive record of earnings per share growth, revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
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 37.54% 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 21.0% 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 $5.35 versus $4.78 in the prior year. This year, the market expects an improvement in earnings ($6.70 versus $5.35).
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.5%. Since the same quarter one year prior, revenues rose by 13.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that AET's debt-to-equity ratio is low, the quick ratio, which is currently 0.53, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: AET Ratings Report
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