Bank Of America Diverges On Aetna Inc, WellPoint Inc Ratings

The second and third-largest U.S. health insurers diverged in the ratings of an investment bank Monday.

Bank of America's Kevin Fischbeck boosted his rating on WellPoint Inc WLP to Buy with a target of $140, while cutting his rating on Aetna Inc AET to Neutral.

Investors have worried recently that new enrollees in Obamacare exchanges will boost medical spending and thus hurt profits of private insurers. This despite a string of upside earnings surprises in the recent quarter.

WellPoint, which plans to change its name to Anthem Inc. in November, hit a 52-week high last month after earnings beat Wall Street consensus on lower-than-expected medical costs as a percentage of premiums. Net profit, however, fell 8.6 percent.

Aetna similarly beat earnings expectations last month, but also posted higher medical costs that seemed to confirm investors' worries.

Aetna shares are up 5 percent in the past month, versus an 8 percent gain for WellPoint.