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) 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), 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."