Aetna Inc. (AET) Cut to “Hold” at Zacks Investment Research
Aetna Inc. (NYSE:AET) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Thursday.
According to Zacks, “Aetna’s third-quarter earnings surpassed the Zacks Consensus Estimate and grew year over year, driven by strong underwriting margin performance, disciplined pricing, a focus on high quality care management, and a decline in medical cost. Aetna’s shares have outperformed the industry year to date. We expect the company to witness long-term growth from its Government business and International expansion. Its cost-reduction initiatives will aid margins. The sale of its Group Life and Disability business will help it to focus on core growth areas. Following strong third-quarter results, Aetna raised its earnings guidance, cementing investors' confidence in it. Aetna has, however, been incurring losses in its public exchange business and has been exiting exchanges. Furthermore, its membership growth remains under pressure. Increasing medical benefit ratios are also likely to hurt margins.”
Other equities analysts have also recently issued reports about the company. Deutsche Bank AG increased their price target on Aetna from $144.00 to $157.00 and gave the company a “hold” rating in a report on Thursday, July 13th. Credit Suisse Group reissued an “outperform” rating and set a $165.00 price target (up from $160.00) on shares of Aetna in a report on Thursday, July 13th. Jefferies Group LLC reissued a “hold” rating and set a $163.00 price target (up from $157.00) on shares of Aetna in a report on Friday, August 4th. Cantor Fitzgerald reissued an “overweight” rating and set a $175.00 price target (up from $150.00) on shares of Aetna in a report on Wednesday, August 9th. Finally, BMO Capital Markets assumed coverage on Aetna in a report on Monday, October 16th. They set a “market perform” rating and a $175.00 price target on the stock. Ten research analysts have rated the stock with a hold rating and fourteen have given a buy rating to the company’s stock. The stock currently has a consensus rating of “Buy” and an average price target of $165.62.
Aetna (NYSE:AET) last issued its earnings results on Tuesday, October 31st. The company reported $2.45 EPS for the quarter, beating the consensus estimate of $2.06 by $0.39. Aetna had a return on equity of 21.84% and a net margin of 2.93%. The business had revenue of $14.99 billion for the quarter, compared to the consensus estimate of $15.12 billion. During the same period last year, the business posted $2.07 EPS. The company’s revenue was down 5.0% compared to the same quarter last year.
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In other Aetna news, EVP Margaret M. Mccarthy sold 10,288 shares of the firm’s stock in a transaction dated Friday, September 15th. The shares were sold at an average price of $162.85, for a total value of $1,675,400.80. Following the completion of the sale, the executive vice president now owns 33,563 shares of the company’s stock, valued at $5,465,734.55. The sale was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, President Karen S. Lynch sold 15,271 shares of the firm’s stock in a transaction dated Monday, September 18th. The stock was sold at an average price of $161.91, for a total transaction of $2,472,527.61. Following the completion of the sale, the president now directly owns 64,261 shares of the company’s stock, valued at approximately $10,404,498.51. The disclosure for this sale can be found here. 0.90% of the stock is owned by company insiders.
Institutional investors have recently bought and sold shares of the company. Wells Fargo & Company MN raised its stake in shares of Aetna by 1.2% during the third quarter. Wells Fargo & Company MN now owns 1,894,948 shares of the company’s stock valued at $218,771,000 after acquiring an additional 21,988 shares in the last quarter. Arizona State Retirement System raised its stake in shares of Aetna by 0.5% during the third quarter. Arizona State Retirement System now owns 95,234 shares of the company’s stock valued at $10,995,000 after acquiring an additional 500 shares in the last quarter. Jennison Associates raised its stake in shares of Aetna by 51.2% during the third quarter. Jennison Associates now owns 1,014,876 shares of the company’s stock valued at $111,038,000 after acquiring an additional 343,647 shares in the last quarter. Quotient Investors raised its stake in shares of Aetna by 260.0% during the fourth quarter. Quotient Investors now owns 34,560 shares of the company’s stock valued at $3,737,000 after acquiring an additional 24,960 shares in the last quarter. Finally, State of Tennessee Treasury Department raised its stake in shares of Aetna by 26.3% during the second quarter. State of Tennessee Treasury Department now owns 557,814 shares of the company’s stock valued at $84,692,000 after acquiring an additional 116,280 shares in the last quarter. 89.45% of the stock is owned by hedge funds and other institutional investors.
Aetna Inc is a diversified healthcare benefits company. The Company operates through three segments: Health Care, Group Insurance and Large Case Pensions. It offers a range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, medical management capabilities, Medicaid healthcare management services, Medicare Advantage and Medicare Supplement plans, workers’ compensation administrative services and health information technology (HIT) products and services.
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