Aetna (AET) Stock Gaining After Price Target Raised at Leerink

NEW YORK (TheStreet) -- Shares of Aetna  (AET) are advancing 0.72% to $125.87 after Leerink raised its price target to $145 from $135 while reiterating its "outperform" rating.

Aetna appears interested in either Cigna Group (CI) or Humana (HUM), and the firm believes Aetna could be a strategic buyer of Cigna with teens accretion, according to the analyst note.

"Aetna-Humana is also a logical combination and we believe Aetna could get Humana at a more attractive deal price of $200 to $225 rather than $225 to 250 per share, thus improving accretion," Leerink analysts added.

Aetna is a diversified health care benefits company that offers a range of traditional, voluntary and consumer-directed health insurance products and related services.

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 45.65% 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 13.1%. 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

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