MOH To Continue To Deliver EPS Upside In 2010

Analysts at Citigroup initiate coverage of Molina Healthcare MOH with a "buy" rating. The target price for MOH is set to $33. According to Citigroup, “Molina should continue to deliver EPS upside relative to consensus in 2010… Because Medicaid is the one area of managed care where growth is likely, our sense is that the larger plans will be forced to buy the pure play Medicaid plans as a way to enter the business or increase their existing exposure, considering the challenges plans face in both their commercial and Medicare products because of reform.” “By our calculation, Molina stands to gain nearly 500,000 new lives in 2010, adding nearly $1.2 billion in incremental revenue. At a 3% margin, the new membership would add about $35 million in EBITDA, or $0.80 per share, roughly 47% of our current 2010 earnings projection,” the analysts say. More Analyst Ratings here.