Shares of insurance company Health Net Inc. bounced back Tuesday, partially recovering from losses after its first-quarter earnings and second-quarter outlook disappointed investors.
Health Net (nyse: HNT - news - people )'s profit and revenue matched Wall Street expectations Monday, but the stock fell 5 percent because total health plan enrollment was down. The company's second-quarter forecast of 79 cents per share was a penny below the consensus of analysts polled by Thomson Financial.
Lehman Brothers (nyse: LEH - news - people ) analyst Joshua Raskin reiterated an "Underweight" rating on Health Net shares, but raised his price target to $52 from $46. Raskin said he is concerned about declining membership in the company's commercial business, but in his view the quarter was uneventful and Monday's drop had more to due with the stock price than the news.
"We believe that the selloff was simply due to recent strength in the stock and not a reflection of any fundamental concerns that arose from the quarter," he said. The stock had gained $4.02, or 7.6 percent, since March 12, when UnitedHealth Group Inc. (nyse: UNH - news - people ) said it is buying Sierra Health Services Inc. (nyse: SIE - news - people )
Health Net shares gained $1.19, or 2.2 percent, to close at $55.25 on the New York Stock Exchange.
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