UPDATE: Bank of America Downgrades WellPoint to Underperform on Election Outcome
Bank of America reduced its rating on WellPoint (NYSE: WLP) from Buy to Underperform and lowered its price objective from $70 to $63.
Bank of America said, "HC Reform includes many provisions that will be serious earnings headwinds as we approach 2014 including the effect of the exchanges on the Commercial business, minimum MLR in Medicare Advantage, and the industry fee. While the impacts of these provisions have been scrutinized for the past few years, the range of potential outcomes is quite wide with a downside scenario more likely than an upside scenario, in our opinion. This uncertainty is likely to leave the group range bound, trading at 7-9x earnings. WLP has the most exposure to 2014 uncertainty and appears unlikely to show significant upside in 2013, so we are downgrading to an Underperform from a Buy and lowering our PO to $63."
WellPoint closed at $61.20 on Tuesday.
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