Bank of America Securities analyst Joanna Gajuk reiterated a Sell rating on Molina Healthcare (MOH – Research Report) today and set a price target of $309.00.
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Joanna Gajuk has given her Sell rating due to a combination of factors impacting Molina Healthcare’s financial performance. Despite a small earnings per share (EPS) beat, concerns remain regarding the Medicare Advantage (MA) Medical Loss Ratio (MLR), which was worse than expected. This raises questions about the company’s ability to maintain positive trends, especially in light of uncertainties surrounding Medicaid funding and exchanges in the upcoming year.
Furthermore, while Medicaid revenues exceeded expectations, driven by better rates and new contract wins, the MA segment lagged behind, with revenues falling short of consensus despite slightly better membership numbers. The company’s consolidated MLR was also higher than consensus, indicating potential challenges in managing costs effectively. These factors contribute to the cautious outlook, leading to the reiteration of an Underperform rating for Molina Healthcare.