Goldman Sachs Prefers Aetna to UnitedHealth in the Insurance Space (UNH)

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Analysts at Goldman Sachs on Monday issued a downgrade to health insurer UnitedHealth Group Inc. ( UNH ), while upgrading its rival Aetna Inc. ( AET ).

The firm said it downgraded UNH from "Buy" to "Neutral" with a $46 price target, which implies a small upside to the stock's Friday closing price of $42.49. Goldman noted the company could face pressures due to its earnings exposure to Medicare Advantage.

Meanwhile, the firm upgraded AET from "Neutral" to "Buy" while boosting its price target from $37 to $44. That new target suggests an 18% upside to the stock's Friday closing price of $37.42.

Goldman noted that Aetna shares have underperformed those of its peers, and are ready to shoot higher. Goldman also raised its earnings estimates for the company through 2012.

UnitedHealth shares fell 37 cents, or -0.9%, in premarket trading Monday, while Aetna shares rose 50 cents, or +1.3%.

The Bottom Line
Shares of UnitedHealth ( UNH ) have a 1.18% dividend yield, based on Friday's closing stock price of $42.49.
Shares of Aetna ( AET ) have a 1.60% dividend yield, based on Friday's closing stock price of $37.44.

UnitedHealth Group Inc. ( UNH ) and Aetna Inc. ( AET ) are both rated "Neutral," with both stocks holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: AET , UNH

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