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Cigna Corp. (CI)

Oppenheimer downgrades to perform from outperform; lowers estimate

Oppenheimer analyst Carl McDonald said his analysis suggests health insurer Cigna significantly underpriced its Medicare Private Fee-For-Service (PFFS) products in 2010. He wrote in a Jan. 26 note that enrollment likely will grow a lot faster than expected, but Cigna's 2010 EPS estimate "should have to come down" while the company will also have to inject more capital into its subsidiaries in order to maintain risk-based capital ratios, limiting available cash for share repurchases. But McDonald also noted that until Cigna recognizes higher-than-expected Medicare costs, there will be a short-term benefit.

The analyst cut his $4.10 2010 EPS estimate to $4.00, and reduced his $39 price target to $38.

Plains Exploration & Production Co. (PXP)

Morgan Stanley downgrades to equal-weight from overweight

Morgan Stanley analyst Stephen Richardson cut his rating on shares of Plains Exploration & Production Co. on Jan. 26, saying the improved outlook for the natural gas producer is now reflected in the stock price.

The analyst said in a note that he still sees 18% upside to his base case value of $40 per share, but the shares discount more of this improving outlook and reserve upside.

"With much of the 2009 catalyst calendar played out, we expect PXP to "re-load" for 2010," the analyst wrote.

Richardson said he views Plains as better positioned today to deliver production (around 10%) and reserve (around 15%) growth over the coming cycle than any time in its recent history. He said that while he is confident in management's ability to generate prospects and interest in the stock, he does not expect further near-term outperformance in the shares.

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