WellCare Health Plans Inc. appears set for solid revenue gains in the new year, but its 2014 forecast revealed little about how some key challenges will affect earnings, according to a Goldman Sachs analyst who covers the insurer.
The Medicare Advantage and Medicaid coverage provider said Tuesday in a regulatory filing that it expects premium revenue to grow 21 percent to 23 percent compared with its forecast for 2013. That projection excludes Medicaid premium taxes. The company expects $9.35 billion to $9.40 billion in 2013 premium revenue, so the projection forecasts 2014 revenue of at least $11.3 billion.
WellCare will release a 2014 earnings forecast next month.
THE OPINION: Analyst Matthew Borsch said in a research note the outlook appears to represent solid growth in the government-funded Medicare Advantage, Medicaid and Medicare prescription drug coverage programs. But it doesn't address challenges like Medicare Advantage rate cuts.
Borsch also noted that the insurer made no reference to its search for a new CEO. WellCare fired Alec Cunningham last fall and said then that it wanted an executive with a track record for leading bigger companies.
"We still believe the CEO departure could open the door for (WellCare) to consider a merger with a larger company, given the goal of building out the company's infrastructure to operate at larger scale," he wrote Tuesday.
THE STOCK: Up 60 cents to $71.64 at the start of trading Wednesday.