J.P. Morgan Still Overweight On Aetna, Has $36 Price Target (AET)

J.P.Morgan Chase & Co is bullish on shares of Aetna AET after the insurer reported strong Q2 earnings yesterday. J.P. Morgan is Overweight on the stock with a $36 price target. In the report, J.P. Morgan writes, "Reported the 2Q Tuesday night, coming in at $1.05, this $0.25/$0.33 above our/consensus view. The upside yet again on lower med costs and this resulting in outsize favorable reserve development ($199mm, or $0.29/share). Recall here that the company had already previewed (though not sized) a 2Q EPS beat about a month ago. Continuing the theme of broadly “slack” utilization, AET posted favorable development in all three of its core segments: commercial, Medicare and Medicaid. In addition, the company also announced it was entering into a 12-year contract with CVS to administer its PBM, while retaining ownership of the business." Shares of Aetna are trading at $27.80, down 56‎ cents.