UPDATE: Bank of America Color on Molina Healthcare PO Increase

Bank of America, which raised its PO on shares of Molina Healthcare Inc. MOH, is providing some color on the stock. “Missouri is implementing a rate increase effective July 1, 2011 for its annual reimbursement update, based on our discussions with industry officials,” Bank of America writes. “A 5% boost is worth $0.07 to MOH's 2011 EPS versus guidance of 0% and compliments a +2.7% in the California May revise budget worth an additional $0.05, which could offset any surprises elsewhere. “Better rates than feared is part of our call for profit margin mean reversion up to a sustainable 2%, which MOH achieved in nine out of the last 12 years. We are revising our 2011 and 2012 stock split adjusted EPS estimates to $1.65 (from $1.60) and $1.97 (from $1.92) on these favorable trends.” Molina Healthcare closed Thursday a $26.47.