When Anthem reports ahead of the bell Wednesday, analysts will be watching for its outlook on how tax reform will impact 2018 earnings.
Analysts at Cantor Fitzgerald raised their 2018 earnings estimate for the insurer through $13.00 per share to $16.00, based in part on the assumption in which Anthem’s tax rate will fall through 35.5 percent to 28 percent, due to tax reform.
Whether they’ll use in which extra cash to pursue a merger is usually likely to be one of the big questions for completely new CEO Gail Boudreaux.
“We see the company as having the budget along with motivation to guild out a significant AI team both organilcally along with through M&A [mergers along with acquisitions],” analysts at Piper Jaffray wrote in a recent research note, estimating in which Anthem has $5.5 billion in deployable capital, beyond tax savings.
the idea has been nearly eight months since Anthem terminated its deal to buy rival Cigna, which was blocked by regulators.
On Thursday, Cigna CEO David Cordani is usually likely to face questions about how mergers along with acquisitions will figure from the firm’s plans to deploy tax reform savings.
Leerink analyst Ana Gupte said in a recent research note in which Cigna executives aren’t likely to pursue acquiring their own pharmacy benefit manager. They also don’t seem anxious to do a deal, despite recent moves by competitors.
“Cigna is usually not looking at a deadline on capital deployment along with is usually still actively contemplating its… strategic priorities,” Gupte wrote.