Magellan Health should trade higher on ‘favorable’ settlement, says Jefferies

Jefferies analyst David Styblo expects Magellan Health o trade higher today following a “favorable” settlement with Florida officials regarding its Serious Mental Illness contract. In April, Magellan was not selected to continue its $600M contract, but last night’s update allows the company to retain about 40% of its business, Styblo tells investors in a research note titled “A Bird In The Hand: MGLN Settles and Retains Part of Florida SMI Contract.” The analyst believes the contract should be a contributor to earnings in 2020 after management “right-sizes fixed costs.” He keeps a Buy rating on Magellan Health with a $90 price target.
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