J.P. Morgan Neutral On Coventry Health Care (CVH)

J.P. Morgan Chase & Co. has a Neutral rating and a $32 price target on shares of Coventry Health Care CVH after it reported earnings. In a note to investors, J.P. Morgan writes, "The 1Q reported at $0.74/share vs our $0.51. Yes, lower med costs the factor with the MCR coming in at 82.6%, 190bps better. Within this, most books showed better than our outlook, commercial about 100bps, Medicare Advantage and Part D also both better, while the Medicaid MCR ran above. Included in the report is $0.08 benefit from the discontinued Medicare PFFS book also. CVH updating its guidance, moving up the midpoint 2011 EPS by $0.15 to $2.75, notably though we/the Street already running above that at $2.85 (though high end of guidance now matches this). It's a less significant guidance raise than we've seen from some others so far this season, although there are some offsets. Among these, an extra $0.06-$0.07/share for higher interest costs should CVH refinance its '12 debt maturities early." Shares of CVH are down $2.01 today to trade at $32.34, a loss of nearly 6%.