Deutsche Bank Has Increased Confidence In WellPoint's 4Q

WellPoint, Inc. (NYSE: WLP) issued an 8-K on 12/7 disclosing that it expects to record a benefit to EPS in 4Q due to a change in its estimated margin for adverse deviation included in its medical claims payable balance, Deutsche Bank reports.

“Historically, WLP would include a margin for adverse deviation in the mid-to-upper single digit range when establishing it claims reserves,” Deutsche Bank writes. “WLP will now likely adjust the estimated margin to the mid-single digit range when it sets its medical claims reserves for 4Q10.”

As a result, Deutsche Bank said that it has increased confidence that WLP's 4Q results will “meet or exceed our EPS estimate of $1.30, which is 12% above the Street consensus estimate of $1.16.”

WellPoint closed Tuesday at $55.75.