UPDATE: Goldman Sachs Downgrades Humana to Sell on Healthcare Reform Headwinds

Goldman Sachs lowered its rating on Humana

from Neutral to Sell. Goldman Sachs said, "With this report, we downgrade Humana to Sell from Neutral, reflecting that the company derives a majority of its earnings, by our estimate, from the MA products that face significant headwinds and uncertainties as funding and other changes from health reform roll through. We think this will make P/E multiple recovery (expansion) difficult for HUM and there is downside risk to earnings as we enter the critical phase of MA payment transitions in 2014-2017. That said, our Sell rating on HUM is relative to our Neutral coverage view of Managed Care." Humana closed at $76.16 on Tuesday.