UnitedHealth "buy," target price reduced

26.03.08 - Deutsche Securities

NEW YORK, March 26 (newratings.com) - Analyst Scott Fidel of Deutsche Bank Securities maintains his "buy" rating on UnitedHealth Group (UNH), while reducing estimates for the company. The target price has been reduced from $64 to $54.

In a research note published yesterday, the analyst mentions that the company is facing an extreme flu season and its investment yields have declined due to Fed rate cuts. UnitedHealth is also witnessing a decline in Medicare Advantage enrollment growth, the analyst says. Commercial risk enrollment is likely to be lower than was earlier expected, since the weak economy is leading to high attrition, Deutsche Bank Securities adds. The EPS estimate for 1Q08 has been reduced from $0.82 to $0.77.