Molina Healthcare initiated with an Overweight at Morgan Stanley

Morgan Stanley analyst Erin Wright initiated coverage of Molina Healthcare (MOH) with an Overweight rating and $364 price target While “varying permutations of policy headwinds are looming” across Medicaid, the overhang is disproportionately reflected in Molina at “trough valuations,” the analyst tells investors in a research note. The firm sees a strengthening Medicaid footprint and dual eligible integration potential for the company. Policy risk is a key variable but could be more manageable than feared, contends Morgan Stanley. While the Medicaid sector is not without risk, the overhangs are largely reflected in valuations at 10-year troughs, on average, contends the firm.