Goldman Makes WellPoint Top Pick

Analyst Matthew Borsch raises the managed health care company's estimates based on share buybacks and an upside to merger synergies

Goldman names Wellpoint (WLP ) as its top pick in the managed care group.

Analyst Matthew Borsch says WellPoint is his top stock pick for 2005. He raises his $6.60 2004 operating earnings per share estimate to $6.62. He ups his $7.70 2005 earnings per share to $7.77 and $9.00 2006 earnings per share to $9.10.

He thinks WellPoint will outperform the group under either moderately favorable or a moderately unfavorable scenario for industry, with defensive positioning with price leadership in its 13 core markets and limited exposure to nonprofit Blues.

With the benefit of share buybacks and upside to merger synergies, he believes WellPoint can achieve his 17% earnings per share growth forecast in 2005 to 2006 even if organic net income growth slows to 10%.

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