Back to top

Analyst Blog

On Jun 21, 2013, we upgraded our recommendation on the shares of Aetna Inc. (AET - Analyst Report) to Outperform from Neutral as we gain increased confidence about the company’s operations. 
Aetna has been performing strongly over the past several quarters and we expect the company to continue performing well going forward, backed by the growth in Medicaid and Medicare network segments, fast-growing health services segment, and an expanding provider network. 
Why Upgradation?
Aetna’s execution over the last few years has been excellent. While performance has been strong across the board, a stand-out area is the organic and acquisition-fueled growth.
Aetna has made huge investment in technology upgradation as well as acquisition.  
Aetna recently concluded the acquisition of Coventry. The acquisition enhances the company’s Medicaid footprint, gives it more credibility, and positions the company better for the enormous Medicaid RFP, expansion and dual growth opportunities. 
It has also made a number of acquisitions in its Commercial business over the past 2-3 years. 
Additionally, Aetna is aggressively forming Accountable Care Organizations to generate incremental revenues.
We also have a growing optimism for international growth opportunities at Aetna. The company is actively entering foreign markets. It is targeting Asian markets like India and China both of which present huge potential for growth. 
A strong balance sheet with an efficient capital management program provides inherent strength. The company is also witnessing an increase in membership. 
Our optimism is  echoed in the estimate revisions as well. Over the last 60 days, 4 of the 9 estimates moved north, pushing up the Zacks Consensus Estimate for 2013 by 5.5% to $5.79. Estimates for 2014 rose 8.6% to $6.31 as 9 of 11 estimates were raised over the same time frame. The expected long term earnings growth is 11.5%. 
Other Stocks to Consider
Other players under our coverage, Molina Healthcare, Inc. (MOH - Analyst Report) with Zacks Rank # 1 (Strong Buy), Health Net, Inc. (HNT - Analyst Report) and WellPoint Inc. (WLP - Analyst Report) with Zacks Rank #2 (Buy) are worth considering.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%