UPDATE: Goldman Sachs Reiterates Buy Rating, Lowers PT on WellCare Health Plans

In a report published Monday, the Goldman Sachs Group reiterated its Buy rating on WellCare Health Plans

, but lowered its price target from $77.00 to $70.00. Goldman Sachs noted, “We think market reaction to the signs of pressure from Kentucky Medicaid was overdone (WCG down 11.6% on Friday August 3 vs. S&P500 up 1.9%). That said, investor skepticism is understandable given the wide range of earnings problems seen across managed care so far this year. In addition, both of the other two Medicaid operators in Kentucky (CNC and CVH) have made substantial reductions to their 2012 earning outlook. Meanwhile, the 5-day drop in days claims payable in 2Q drove concerns that reserves may not reflect adequate cushion for claims run-out. However, all in, we think the narrative offered by management on reserving is credible given WCG was upfront about acknowledging where pressure from KY-M impacted 2Q results.” WellCare Health Plans closed on Friday at $55.12.