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U.S. Equity Research News
Shove Downgrades Amerigroup (AGP) to MARKET PERFORM from OUTPERFORM
November 2, 2009
Dave Shove, senior research analyst on our Healthcare team, has today downgraded Amerigroup (AGP) to a MARKET PERFORM rating from OUTPERFORM.
From Shove's note: "After the preannouncement of a disappointing third quarter performance earlier in the week, Amerigroup released full quarterly results on Friday. A skyrocketing medical loss ratio of 87.5%, pushed upward by an uptick in outpatient services and flu related costs, dragged on the quarterly earnings. With 87% of the company's membership in what management is classifying as "high risk" groups for H1N1, Amerigroup appears to have been hit hard by the flu. Additionally, state budgetary pressures show no sign of abatement, hindering profitable Medicaid program growth in the near term. With no visibility and no near-term catalyst to improve business fundamentals, we no longer feel compelled to be constructive on AGP shares."
For more information or to receive a full copy of the report, please contact your BMO Capital Markets representative.
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