Jefferies Initiates Coverage On Aetna (AET)

Jefferies & Co. is initiating coverage on Aetna Inc. AET with a Hold rating and a $33 price target on shares. In a note to clients, Jefferies writes, "Historically, the four national, diversified MCOs (UNH, WLP, AET, CI) have been the most aggressive companies to repurchase their stock. We expect management teams will continue to view stock repurchase as a way of indirectly returning capital to shareholders. Some companies prefer this method since the investor can choose when to recognize gains for tax purposes. Many companies are also more hesitant to initiate a dividend since it locks a company into a cash outflow commitment. UNH has been an early mover in raising its dividend to a meaningful level. We anticipate that others may follow suit, but companies' willingness to be aggressive on dividends will also be limited by political scrutiny." Shares of AET lost 8 cents yesterday to close at $31.83.