) and WellPoint Health Networks (WLP
) to hold from buy.
Analyst David Shove says near-term legal and headline risk is rising as pharmacy benefit managers (PBMs) suffer from the U.S. Attorney's investigation of drug marketing practices. Despite the belief that HMO valuations, in the long term, will likely continue to rise as investors realize that the underwritings pricing cycle has faded and without good visibility on near-term legal developments, he moves to a more conservative posture on the group.
He downgraded WLP and HUM based on their specific exposure to legal issues, he says.