Jefferies analyst David Windley provided his insights on Molina Healthcare, Inc. (NYSE:MOH) after the firm released its 2Q earnings report.

While the analyst notes utilization improvement, he foresees some challenges going into 2017. He states, “We expect MOH to rise on quicker remedies to IT and utilization management issues that led to a ~30% EPS guidance cut last quarter. Utilization in TX and OH has quickly improved, and Puerto Rico’s rate increase is promising. That said, we think HIX deterioration could put a lower ceiling on valuation, particularly if that weakness carries into 2017.”

The analyst maintains his Buy rating on shares and cut his price target to $63 from $66.

According to TipRanks, David Windley is ranked #15 out of 4,087 analysts. He has a 78% success rate recommending stocks with an average return of 20.2% per recommendation.