Wells Fargo Downgrades Health Net (HNT) to Market Perform; Cutting Estimates After Q1 Miss

Wells Fargo downgraded Health Net (NYSE: HNT) from Outperform to Market Perform, price target lowered from $41-50 to $29-33.

Analyst, Peter Costa, said, "We believe Health Net's narrow network products and potential for growth in Medicare, Medicaid, and with dually eligible members in California position Health Net for improved performance going forward. However, its lack of visibility on medical cost represents a risk to this potential improved performance."

"Given the medical cost trend pressure in Q4 2011, which seems to have been obscured to the company due to the HIPAA 5010 regulation changes, which caused claims to be delayed, we are lowering our 2012 EPS estimate to $2.25 from $3.45. We are lowering our 2013 EPS estimate to $3.50 from $3.75, but now include some EPS from the likely growth of dual-eligible members in California."

For an analyst ratings summary and ratings history on Health Net click here. For more ratings news on Health Net click here.

Shares of Health Net closed at $36.32 yesterday.

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