UPDATE: Deutsche Bank Cuts PT to $85 on Humana; Margin Pressures

Deutsche Bank lowers its price target on Hold-rated Humana

from $93 to $85 on significant margin contraction seen in the company's Q1 Medicare segment. Deutsche Bank comments, "Core Retail (Medicare) segment shows significant margin contraction in 1Q12. Humana's 1Q12 EPS slumped by 20% from 1Q11 as significant margin contraction in the core Retail segment more than offset solid 11% revenue growth. While HUM raised 2012 EPS guidance by a nickel, it trimmed Retail segment margin guidance for the second time this year. Investors had been expecting margin upside in the Retail segment to drive EPS beats during 2012. We reduce 2012-2013 EPS ests & PT. Maintain Hold rating with solid MA growth offset by margin pressures." HUM closed at $80.68 on Monday.