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Goldman Sachs Downgrades WellCare Health Plans (WCG) to Neutral

May 21, 2013 7:40 AM EDT
Get Alerts WCG Hot Sheet
Price: $349.92 --0%

Rating Summary:
    12 Buy, 12 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Goldman Sachs downgraded WellCare Health Plans (NYSE: WCG) from Buy to Neutral with a price target of $60.00 (from $65.00) citing downside risk to Medicare Advantage (MA)-driven earnings, which is about one-third of the company's earnings.

Shares are up 178% since Goldman upgraded the stock on May 20, 2009, versus 127% for the managed care sector and 84% for the S&P.

"While WellCare's MA exposure is not new, the process of MA rate finalization revealed more vulnerability on the risk recalibration rate factor for 2014," analyst Matthew Borsch said. "Combined with the slow pace of STAR quality score improvement at WellCare, these factors largely offset the near-term benefit of WellCare all-HMO product position, in our view."

The firm revised 2014 EPS to $5.50 (prior $5.75) and 2015 EPS to $6.30 (prior $6.65)

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

Shares of WellCare Health Plans closed at $53.85 yesterday.


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