Magellan Health Services "outperform," target price reduced

05/06/08 - Credit Suisse

NEW YORK, May 6 (newratings.com) - Analyst G Nersessian of Credit Suisse reiterates his "outperform" rating on Magellan Health Services Inc (MGLN), while reducing his estimates for the company. The target price has been reduced from $55 to $48.

In a research note published yesterday, the analyst mentions that following the loss of the TennCare East and West contracts, there are no significant customer contracts in the Commercial or Public Sector segments, for which the company can bid in the forthcoming one-to-two years. The EPS estimate for 2008 has been reduced from $2.35 to $1.97 to reflect lower investment income and higher stock compensation expenses.