Deutsche Bank Has Buy On Aetna (AET)

Deutsche Bank has a Buy rating and a $46 price target on shares of Aetna AET after the company held its investor conference.

In a note to investors, Deutsche Bank writes, "Aetna kicked off the meeting by noting that 2011 is off to a good start and that it now has increased confidence in its 2011 EPS guidance of $3.70-3.80. This suggests that medical cost trends remain under control so far for Aetna in 2011. The company also has a strong capital outlook with $1.2 billion of expected net cash generation. Notably, while Aetna is losing market share in 2011, management is hopeful that the company will return to growth in 2012. Aetna also released new disclosures on its operating earnings mix that show that the Individual business generated only 2% of 2010 earnings while small group contributed 9%; these are the Commercial markets most negatively impacted by
health reform. Conversely, markets that are either less affected or positively impacted by health reform (including Commercial ASO, large group, group insurance, and Medicaid) accounted for nearly 75% of earnings. The key takeaway is that Aetna has a relatively defensive business profile in regards to health reform."

Shares of AET lost 53 cents on Friday to close at $38.34,a loss of 1.36%.