Back to top

Analyst Blog

We are reiterating our Outperform recommendation on  Aetna Inc. (AET - Analyst Report), reflecting our continued optimism about the company’s growth prospects and below-average health reform risks due to business mix. 
Why Reiteration?
Aetna’s business execution over the last few years has been excellent. While performance has been strong across the board, a stand-out area is its organic and acquisition-fueled growth.
Aetna has also made huge investment in technology upgradation.  
Aetna recently concluded the acquisition of Coventry. The acquisition has enhanced the company’s Medicaid footprint, gives it more credibility, and better positioned the company 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. At the same time, the company is witnessing an increase in membership.
Aetna is also aggressively forming Accountable Care Organizations to generate incremental revenues.
We view international growth opportunities at Aetna with growing optimism.
A strong balance sheet with an efficient capital management program provides inherent strength. 
This Zacks Rank #2 (Buy) health insurer has been witnessing an increase in earnings estimate over the past 60 days. The Zacks Consensus Estimate for 2013 increased 0.7% to $5.87 as 9 out of 14 estimates moved north. The same for 2014 rose 0.2% to $6.36 as 6 of 15 estimates were raised over the same time frame. The expected long term earnings growth is 11.9%. 
Other Stocks to Consider
Other players, United Health Group Inc. (UNH - Analyst Report), Health Net, Inc. (HNT - Analyst Report), WellPoint Inc. (WLP - Analyst Report) all 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
ERBA DIAGNO… ERB 3.68 +3.66%
WEATHERFORD… WFT 23.75 +3.58%
BANCO DO BR… BDORY 14.42 +3.37%
AIR INDUSTR… AIRI 9.89 +3.13%
EQT MIDSTRE… EQM 97.88 +3.11%