2013-07-02 CNC Wells Fargo S Equity Squawks63769500.pdf

Please see page 4 for rating definitions, important disclosures
and required analyst certifications
All estimates/forecasts are as of 07/02/13 unless otherwise stated.
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July 2, 2013
Equity Research
Equity Squawks
8:30 A.M. Edition

INSIDE THIS ISSUE
Page Headline Analyst
2 GBX: The Greenbrier Companies, Inc.: Gbx: Orders Still Solid,
Progress On Strategic Plan, But Lower Deliveries Drive Fq3 Miss
Poliniak-Cusic
2 PPL, IDA: Energy And Utility Daily Kalton
3 CNC: Centene Corp.: CNC: Another Court Step - This One Positive For
Centene
Costa

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GBX: Orders Still Solid, Progress On Strategic Plan, But Lower Deliveries
Drive Fq3 Miss

The Greenbrier Companies, Inc.

Analyst: Allison Poliniak-Cusic, CFA

(DIVERSIFIED INDUSTRIALS, MARKET WEIGHT)
(GBX, $23.70, OUTPERFORM / V)

GBX reported that it earned $0.50 per share in FQ3, below our $0.53 estimate and the $0.55 consensus view.

The Positives: (1) Orders remained strong in FQ3. GBX noted that it received orders for 5,500 new railcars. More
importantly, orders were broad for GBX with tank car orders accounting for only 37% of its new orders. Subsequent to
quarter end, it has received orders for 2,100 new railcars thus far in FQ4. Backlog ended the quarter at 14,200 units, up
21.4% sequentially. (2) GBX reported progress on its strategic initiatives put out in FQ2. It announced facility reductions
and management changes in its underperforming Wheels, Repair, and Parts segment. The actions announced are
expected to return at least $25 million of capital by year end 2013 and eliminate corporate gross margin drag by 30bps.

The Negatives: (1) Deliveries in FQ3 were lower than expected tank and intermodal cars delivered-2,500 units delivered
in FQ3 compared to our estimate of 3,600. As a result, GBX now expects FY2013, ending August, deliveries to now be
in a range of 11,750-12,250 units down from its prior view of 13,000 units. (2) Adjusted EBITDA for FY2013 is now
expected to be in a range of $150-155 million below last year compared to GBX's prior view of similar to its roughly $160
million in FY2012.

While the lower deliveries in FQ3 was a negative surprise, results off of that lower revenue number appeared solid. More
important, in our view, is the strengthening backlog and progress on its strategic initiatives. As a result, we would be
buyers on weakness if the shares are pressured on the FQ3 revenue and earnings miss.

Conference call at 11am, accessible at 630-395-0143; password Greenbrier.

Energy And Utility Daily

Analyst: Neil Kalton, CFA

(ENERGY TEAM, NA)
(PPL, $29.90, MARKET PERFORM)
(IDA, $47.54, MARKET PERFORM)

Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team:

PPL Corp. (PPL/Market Perform) (Kalton) - On 7/1, PPL management provided an in depth presentation on the
company's proposed U.K. rate plan post the expiration of the current 5-year plan in April 2015 (DCPR5). The proposed
RIIO-ED1 (Revenue = Incentives + Innovation + Outputs (Electricity Distribution 1) covers the period 2015-2023 and is of
keen interest considering PPL's U.K. utility operations are expected to account for over 50% of consolidated earnings
over the next several years. The RIIO-ED1 proposal is subject to Ofgem approval. In conjunction with the plan, PPL
provided initial '15 and '16 EPS guidance for the U.K. operations of $1.19-1.31 and $1.17-1.33, respectively. This
compares with '14 EPS guidance of $1.25-1.32. It is our understanding that PPL's '15 and '16 EPS guidance includes
incentives due under the existing DCPR5 plan but not potential incremental incentives under the RIIO-ED1 proposal.
The company's proposal appears to be relatively consistent with the assumptions underlying our 15E and 16E EPS for
the U.K. businesses. Our 13-16E EPS for PPL consolidated remain $2.30, $2.25, $2.35 and $2.40.

IDACORP, Inc. (IDA/Market Perform) (Akers) - On 6/28, Idaho Power submitted the 2013 Integrated Resource Plan
(IRP), which outlines load growth and resource needs for the next 20 years, with the Idaho Commission. As previewed in
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the 2011 IRP update earlier this year, the 2013 IRP does not unveil any unexpected resource additions - the preferred
portfolio appears consistent with IDA's 2013-2015 CapEx guidance.

Key near-to-intermediate-term resource additions include selective catalytic reduction (SCR) equipment on Jim Bridger 3
and 4 in 2015E and 2016E, the Boardman to Hemingway (B2H) transmission line in-service in 2018, up to 150 MW of
demand response to meet deficiencies until B2H is online, the 49 MW Shoshone Falls upgrade by 2019, and SCRs on
Jim Bridger 1 and 2 in 2019E and 2020E. These plans assume annual average system load growth of 1.1% (1.1%
residential and commercial, 0% irrigation, 1.7% industrial, and additional firm load growth of 1.2%).

Regarding B2H, Idaho Power submitted the preliminary application for site certificate to the Oregon Department of
Energy in late February with the final application filing scheduled in the Spring of 2014. Separately, the Bureau of Land
Management (BLM) announced the preliminary environmentally preferred route to the public on May 3, 2013. While
progress is being made, we view the 2018 in-service date as a best case scenario and wouldn't rule out additional delays
given the size, scope and permitting/routing issues. According to the IRP, Idaho Power intends to use demand response
programs to adapt to B2H schedule variations.

While light on new rate base growth opportunities, we would not rule out new gas-fired capacity in future IRP iterations
(filed every 2 years; updated every year in between). Peaking and baseload gas were the next two most economic
resource additions after B2H, and we'd highlight recent bullish economic commentary from IDA's management. Reiterate
Market Perform on valuation considerations.

CNC: Another Court Step - This One Positive For Centene

Centene Corp.

Analyst: Peter Costa

(MANAGED CARE, MARKET WEIGHT)
(CNC, $52.54, OUTPERFORM)

Centene received a favorable ruling today (7/1) from a Kentucky appellate court judge that denied the state's motion to
keep it operating in the state without a two month transition period which could have meant CNC might need to continue
operating in the state beyond August 31. However, we note that this ruling does not impact the date upon which Centene
may exit the program. Centene has made an offer to the state in which it would agree to remain in the program until
August 31, 2013, but it is unclear how the state will choose to proceed.
We note that this ruling is separate from the unfavorable ruling on May 31 in which the judge ruled against Centene that
pulling out early would represent a breach of contract. Centene has appealed this decision. Hence, it remains uncertain
when Centene could exit the Kentucky Medicaid program, although management has noted that it does not expect an
exit to extend beyond Q3. We note that Centene's premium deficiency reserve was $18.1 million as of March 31, 2013,
representing approximately $6 million per month. We expect that the company will give more details regarding the
situation on its upcoming Q2 2013 earnings call, scheduled for July 23. Bottom line: This latest ruling, while favorable,
does not absolve Centene of potential damages and costs for any particular time period, nor does it mean that Centene's
case against the state for damages has an improved chance of a favorable outcome. We believe these cases may take
considerable time to resolve, but regardless we expect Centene will eventually exit Kentucky with the only significant
issue remaining the exact cost of that exit.

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Required Disclosures
To view price charts for all companies rated in this document, please go to www.wellsfargo.com\research or write to
7 Saint Paul Street, 1st Floor, R1230-012, Baltimore, MD 21202
ATTN: Research Publications

GBX - Rating and Target Price Changes/Disclosures
Update Date Publication Price Rating Valuation
Range Closing Price
6/29/10 NA Suspended NE 11.49 11/8/10 19.65 OUTPERFORM $25-$27 19.63 3/8/11 25.18 OUTPERFORM $30-$32 25.18 4/7/11 27.18 OUTPERFORM $34-$36 27.56 6/28/12 15.87 OUTPERFORM $23-$25 16.28 11/2/12 14.48 OUTPERFORM $17-$19 13.89 1/9/13 17.75 OUTPERFORM $19-$21 17.75 2/7/13 19.93 OUTPERFORM $22-$24 20.31 3/27/13 21.33 OUTPERFORM $24-$26 21.33 4/4/13 20.89 OUTPERFORM $25-$27
20.89
5/16/13 24.00 OUTPERFORM $27-$29
24.00

PPL - Rating and Target Price Changes/Disclosures
Update Date Publication Price Rating Valuation Range
Closing Price
6/30/10 NA MARKET PERFORM $29-$30 24.95 8/6/10 26.73 MARKET PERFORM $28-$29 26.78 10/28/10 26.35 MARKET PERFORM $27-$28 26.44 11/11/10 26.48 MARKET PERFORM $26-$27 26.55 3/2/11 25.74 MARKET PERFORM $27-$28 25.74 5/6/11 27.39 MARKET PERFORM $29-$30 27.53 11/3/11 30.05 MARKET PERFORM $32-$33 30.00 2/10/12 28.46 MARKET PERFORM $31-$32 28.45 5/4/12 27.41 MARKET PERFORM $28-$29 27.35 11/8/12 29.07 MARKET PERFORM $30-$31
28.73
2/14/13 30.43 MARKET PERFORM $31-$32
30.53
4/15/13 31.99 MARKET PERFORM $33-$34
31.50
5/3/13 32.81 MARKET PERFORM $34-$35
32.73
5/28/13 30.59 MARKET PERFORM $32-$33
30.06
6/24/13 28.98 MARKET PERFORM $29-$30
29.08

IDA - Rating and Target Price Changes/Disclosures
Update Date Publication Price Rating Valuation Range
Closing Price
6/30/10 NA MARKET PERFORM $35-$36 33.27 8/6/10 35.75 MARKET PERFORM $36-$37 36.05 10/29/10 37.00 MARKET PERFORM $38-$39 36.80 11/15/10 36.34 OUTPERFORM $40-$41 36.52 2/9/11 38.22 OUTPERFORM $41-$42 38.05 5/5/11 38.91 OUTPERFORM $42-$43 38.91 7/19/11 39.83 OUTPERFORM $43-$44 39.84 8/4/11 36.47 OUTPERFORM $41-$42 36.47 10/24/11 40.51 MARKET PERFORM $42-$43 40.43 11/4/11 41.33 MARKET PERFORM $43-$44
40.43
1/3/12 42.41 MARKET PERFORM $44-$45
41.80
4/27/12 40.45 OUTPERFORM $44-$45
40.86
6/20/12 41.00 OUTPERFORM $45-$46
41.00
8/3/12 42.53 OUTPERFORM $45-$47
42.67
11/1/12 44.80 OUTPERFORM $47-$49
44.80
11/16/12 40.75 OUTPERFORM $44-$45
41.13 1/2/13 43.35 MARKET PERFORM $44-$46
44.20 2/21/13 46.73 MARKET PERFORM $48-$50 46.73 4/15/13 48.51 MARKET PERFORM $51-$53 47.18 6/24/13 46.94 MARKET PERFORM $48-$49 47.01 CNC - Rating and Target Price Changes/Disclosures Update Date Publication Price Rating Valuation Range Closing Price 6/29/10 NA Suspended NE 21.24 4/19/11 31.46 MARKET PERFORM $32-$35 31.92 9/16/11 31.01 MARKET PERFORM $30-$32
31.39
10/25/11 31.69 OUTPERFORM $39-$42
31.74
1/20/12 44.36 OUTPERFORM $57-$61
43.87
4/9/12 50.80 OUTPERFORM $55-$58
42.97
6/7/12 37.33 OUTPERFORM $51-$55
32.84
6/11/12 26.60 OUTPERFORM $38-$41
27.58
7/24/12 37.13 OUTPERFORM $41-$44
36.76 10/10/12 38.59 OUTPERFORM $43-$46
35.69 2/5/13 43.69 OUTPERFORM $53-$57

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44.99 4/17/13 46.99 OUTPERFORM $55-$59 45.11
Wells Fargo Securities, LLC maintains a market in the common stock of IDACORP, Inc., PPL Corporation, Centene Corp.
Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Centene Corp. within the past 12 months.
Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three
months from Centene Corp., PPL Corporation, IDACORP, Inc., The Greenbrier Companies, Inc.
Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from IDACORP, Inc., PPL Corporation,
Centene Corp. in the past 12 months.
Centene Corp., PPL Corporation, IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research
report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Centene Corp., PPL
Corporation, IDACORP, Inc.
IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client of Wells Fargo
Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securities-related services to IDACORP, Inc.
PPL Corporation, Centene Corp. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client
of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to PPL Corporation, Centene Corp.
Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from Centene Corp., PPL
Corporation, IDACORP, Inc. in the past 12 months.
Wells Fargo Securities, LLC or its affiliates has a significant financial interest in IDACORP, Inc., The Greenbrier Companies, Inc., PPL
Corporation, Centene Corp.
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months from an affiliate of PPL Corporation, IDACORP, Inc.
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Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of PPL Corporation,
IDACORP, Inc. in the past 12 months.

Additional Information Available Upon Request

I certify that:
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issuers discussed; and
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STOCK RATING
1=Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the
next 12 months. BUY
2=Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market
over the next 12 months. HOLD
3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12
months. SELL
SECTOR RATING
O=Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.
M=Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.
U=Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.
VOLATILITY RATING
V = A stock is defined as volatile if the stock price has fluctuated by +/-20% or greater in at least 8 of the past 24 months or if the
analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading.

As of: July 2, 2013
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