UPDATE: Leerink Swann Initiates Coverage on WellCare Health Plans as Valuation Remains Compelling and Points to Multiple Expansion

In a report published Tuesday, Leerink Swann analyst Ana Gupte initiated coverage on WellCare Health Plans (NYSE: WCG) with a Market Perform rating and $72.00 price target.

In the report, Leerink Swann noted, “We are initiating coverage on 9 companies within US Managed Care. We expect upside to 2014E EPS from conservative pricing and the ObamaCare 3R regulations, which offer downside protection from adverse selection. We expect mid-single digit growth for the sector in the next 3-5 years as Medicare and Medicaid are further privatized, access expansion to the uninsured mitigates reform driven Commercial margin compression and investment yields rise with interest rate normalization. We have an Outperform on HUM, CI, WLP and CNC. We rate UNH, HNT, MOH, AET and WCG as Market Perform.”

WellCare Health Plans closed on Monday at $69.57.