Leerink Sees Humana Takeout At $220/Share Or More

Humana Inc (NYSE: HUM) will sell itself to Aetna Inc (NYSE: AET) for $220 or more, an analyst said Friday.

Leerink's Ana Gupte offered a broad view of the apparently pending wave of insurance sector mergers following reports that Humana and Aetna are close to a deal.

CIGNA Corporation (NYSE: CI) had also reportedly made an offer for Humana, but Gupte expects Cigna will soon be acquired by Anthem Inc (NYSE: ANTM) "for modestly more than $184 a share."

UnitedHealth Group Inc. (NYSE: UNH), in turn, won't bid on Aetna, but may acquire both Health Net, Inc. (NYSE: HNT) and Centene Corp (NYSE: CNC) within the next 12 to 18 months, according to Gupte.

Aetna's hookup with Humana will increase its 2017 earnings by 13 percent according to Gupte, who boosted her Aetna price target to $150.

Anthem will add 11 percent to its 2017 earnings after acquiring Cinga, Gupta predicted.

Both the Aetna and Anthem deals would be "highly accretive," according to Gupte.

Humana traded recently at $197.02, down $0.06. The shares are up about 12 percent in the past three months.

Cigna changed hands Friday at $168.71, down $1.09; its shares are up more than 33 percent since April.

UnitedHealth was trading at $123.70, up $1.37, while HealthNet and Centene were both off Friday by less than 1 percent.