JP Morgan Raises Price Target to $43 for Aetna (AET)

JP Morgan has just increased the price target for Aetna AET from $38 to $43. The report notes, “this past Friday AET reported 4Q (EPS at $0.63 vs our $0.60), and like others this season, the med cost ratio coming in much better/lower while the bottom-line impact mitigated by higher G&A spend (some pull forward) holding down the EPS print.” JP Morgan believes Aetna's 2011 pricing and earnings outlook assumes “that cost trend rises to 8%+/-50bps, and this in line with what we are seeing across the sector. For insured business of course it's all about spread and the message consistent: if med cost trend doesn't rise, there's going to be some decent earnings upside.” JP Morgan maintained its Overweight rating while upgrading the price target to $43. Aetna closed at $36.87 on Monday.