Managed Care Stocks Rally As Goldman Sachs Sees Group As Attractive (CI, HNT, UNH)

Managed care stocks are higher today after Goldman Sachs upgraded the group from Neutral to Attractive, citing improving fundamentals, attractive valuation, and limited downside risk under likely outcomes for health reform legislation.

The firm raised their price targets on a number of stocks in the sector, while conviction buy list-rated CIGNA (NYSE: CI) remains their favorite stock in the sector.

The firm continues to see the passage of comprehensive health reform legislation as more than 50% likely, but believes that Senate moderates will prevail in curbing provisions that imperil the future of the private-sector health insurance industry.

Target Changes:

• CIGNA (NYSE: CI) (CL-Buy) from $39 to $43
  
• Health Net (NYSE: HNT) (Buy) from $22 to $26
  
• UnitedHealth (NYSE: UNH) (Buy) maintains $33
  
• Aetna (NYSE: AET) (Neutral) from $31 to $34
  
• Humana (NYSE: HUM) (Neutral) maintains $38
  
• WellPoint (NYSE: WLP) (Neutral) from $53 to $60
  
• Coventry (NYSE: CVH) (CL-Sell) from $20 to $22.

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