A Collins Stewart analyst said shares for health insurers, including several with headquarters or operations in Hartford, may rise as the health-care overhaul debate is resolved, but he thinks business conditions will get worse over the next year to 18 months.
Analyst Brian Wright began covering the sector with a rating of “market weight” this week. He said the shares will probably stage a relief rally if there is no significant overhaul, or if Congress passes a bill that does not include a public option. However he thinks rising medical costs will continue to pressure profits for the insurers.
He said any rally would be a good time for investors to take profits.
Wright assigned “buy” ratings to two insurers, Humana Inc. and UnitedHealth Group Inc. He gave “hold” ratings to Aetna Inc., Amerigroup Corp., Centene Corp., Cigna Corp., Coventry Health Care Inc., Health Net Inc., Molina Healthcare Inc. and WellPoint Inc. WellPoint owns Anthem Blue Cross Blue Shield of Connecticut.
The analyst said his 2010 profit estimates for the sector are 10 percent below Wall Street averages. (AP)
