Zacks Investment Research Upgrades Aetna Inc. (AET) to “Buy”
Aetna Inc. (NYSE:AET) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a note issued to investors on Tuesday. The brokerage currently has a $128.00 price target on the stock. Zacks Investment Research’s target price indicates a potential upside of 11.58% from the company’s current price.
According to Zacks, “Aetna expects long-term growth from its outperforming Government business. In addition, its International business provides necessary diversification benefits. Cost-reduction initiatives will also add to the bottom line. A strong balance sheet is another positive. Nevertheless, the company has been sued by the DoJ over the Humana acquisition. The deal, which would have enhanced its market power, now remains clouded in uncertainty. Aetna is also incurring losses in its public exchange business and is exiting any exchanges to save itself from the losses from this business. Moreover, its membership growth remains under pressure. Increasing medical benefit ratios and cessation of share buyback due to the pending merger of Humana will further hurt the bottom line.”
Other analysts have also issued reports about the company. Leerink Swann reaffirmed a “buy” rating and issued a $135.00 target price on shares of Aetna in a research report on Thursday, August 4th. Morgan Stanley reaffirmed a “buy” rating on shares of Aetna in a research report on Tuesday, June 14th. Evercore ISI started coverage on Aetna in a research report on Thursday, September 22nd. They issued a “buy” rating and a $128.00 target price for the company. FBR & Co reaffirmed a “hold” rating and issued a $135.00 target price on shares of Aetna in a research report on Thursday, August 4th. Finally, Credit Suisse Group AG reaffirmed a “hold” rating and issued a $120.00 target price on shares of Aetna in a research report on Wednesday, August 3rd. Six investment analysts have rated the stock with a hold rating and eleven have assigned a buy rating to the company’s stock. The stock presently has an average rating of “Buy” and a consensus target price of $132.43.
Aetna (NYSE:AET) traded down 0.31% during mid-day trading on Tuesday, hitting $114.37. The stock had a trading volume of 673,042 shares. The stock has a market cap of $40.12 billion, a PE ratio of 16.76 and a beta of 0.54. Aetna has a 1-year low of $92.42 and a 1-year high of $123.57. The firm’s 50-day moving average price is $116.72 and its 200-day moving average price is $115.78.
Aetna (NYSE:AET) last issued its earnings results on Tuesday, August 2nd. The company reported $2.21 EPS for the quarter, beating analysts’ consensus estimates of $2.12 by $0.09. Aetna had a return on equity of 16.44% and a net margin of 3.89%. The business earned $15.95 billion during the quarter, compared to analyst estimates of $15.69 billion. During the same period in the previous year, the company posted $2.05 EPS. The firm’s revenue was up 4.7% compared to the same quarter last year. On average, equities analysts expect that Aetna will post $8.05 earnings per share for the current year.
The company also recently declared a quarterly dividend, which will be paid on Friday, October 28th. Stockholders of record on Thursday, October 13th will be issued a $0.25 dividend. The ex-dividend date of this dividend is Tuesday, October 11th. This represents a $1.00 annualized dividend and a dividend yield of 0.87%. Aetna’s payout ratio is currently 14.73%.
In related news, Director Jeffrey E. Garten sold 7,100 shares of the stock in a transaction on Wednesday, September 7th. The stock was sold at an average price of $116.51, for a total value of $827,221.00. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, insider Shawn M. Guertin sold 45,328 shares of the stock in a transaction on Tuesday, August 23rd. The shares were sold at an average price of $120.21, for a total value of $5,448,878.88. Following the completion of the transaction, the insider now directly owns 44,883 shares in the company, valued at approximately $5,395,385.43. The disclosure for this sale can be found here. 0.90% of the stock is currently owned by insiders.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in AET. Renaissance Technologies LLC boosted its position in Aetna by 111.5% in the first quarter. Renaissance Technologies LLC now owns 412,190 shares of the company’s stock worth $46,310,000 after buying an additional 217,300 shares in the last quarter. PGGM Investments boosted its position in Aetna by 54.7% in the second quarter. PGGM Investments now owns 794,893 shares of the company’s stock worth $97,080,000 after buying an additional 280,978 shares in the last quarter. Bridger Management LLC purchased a new position in Aetna during the first quarter worth approximately $62,926,000. Panagora Asset Management Inc. boosted its position in Aetna by 10.2% in the first quarter. Panagora Asset Management Inc. now owns 1,212,479 shares of the company’s stock worth $136,222,000 after buying an additional 112,572 shares in the last quarter. Finally, Samlyn Capital LLC boosted its position in Aetna by 12.9% in the first quarter. Samlyn Capital LLC now owns 950,363 shares of the company’s stock worth $106,773,000 after buying an additional 108,650 shares in the last quarter. 91.95% of the stock is currently owned by institutional investors and hedge funds.
Aetna Inc is a diversified healthcare benefits company. The Company operates through three segments: Health Care, Group Insurance and Large Case Pensions. The Health Care segment’s products and services consist of medical, pharmacy benefit management services, dental, behavioral health and vision plans offered on both an insured basis and an employer-funded, or administrative services contact, basis and emerging businesses products and services, such as accountable care solutions (ACS).
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