Kevin Fischbeck, an analyst from Bank of America Securities, reiterated the Hold rating on Molina Healthcare (MOH – Research Report). The associated price target is $350.00.
Kevin Fischbeck has given his Hold rating due to a combination of factors that, collectively, indicate a cautious outlook for Molina Healthcare. Despite the company exceeding earnings per share (EPS) expectations, Fischbeck points out that MOH’s overall performance was relatively muted compared to other companies in the same sector. The key issue was the miss on Medical Loss Ratio (MLR), which was 30 basis points (bps) off the consensus mark, contrasting with peers who beat estimates by 50-70bps. This notably weaker performance was driven by increased outpatient utilization in MOH’s Medicare segment.
Additionally, Fischbeck notes that Molina Healthcare’s decision to reaffirm rather than raise earnings guidance raises questions about potential margin pressures. This is reinforced by the company’s citing ‘seasonality and conservatism’ as reasons for not lifting their outlook. The report also points out that MOH seems to have left out accruals related to peer bankruptcies in its EPS, which could negatively impact perception compared to Q3 peers. Due to these uncertainties, and the potential for redeterminations to lead to higher acuity and MLR than expected, Fischbeck maintains his neutral outlook and holds his forward EPS estimates steady.
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Based on the recent corporate insider activity of 65 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MOH in relation to earlier this year.
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Molina Healthcare (MOH) Company Description:
Molina Healthcare, Inc. engages in the provision of health care services. It operates through the Health Plans and Other segments. The Health Plans segment consists of health plans in 11 states and the Commonwealth of Puerto Rico and includes direct delivery business. The Other segment includes the historical results of the MMIS and behavioral health subsidiaries. The company was founded by C. David Molina in 1980 and is headquartered in Long Beach, CA.
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