Aetna Inc. (AET) reported third quarter earnings per share of 69 cents, which beat the Zacks Consensus Estimate of 66 cents per share. However, earnings declined 38% compared to $1.12 reported in the prior-year period.
Although revenues increased 9% year over year to $8.72 billion during the quarter, membership has slumped throughout the health insurance sector as employers have cut jobs, thereby leading to a reduction in the number of people covered by employer-sponsored plans.
While we are pleased with Aetna receiving the TRICARE contract, we remain concerned about the current litigation revolving around it. Given these issues, we downgrade the stock to Underperform with a price target of $28.50.Zacks Investment Research
