UPDATE 1-RESEARCH ALERT-Analysts temper views on HMO stocks

(Adds details, background)

March 11 (Reuters) - Goldman Sachs and Bear Stearns
downgraded the managed care sector on Tuesday, a day after
WellPoint Inc (WLP.N: Quote, Profile, Research), the largest U.S. health insurer by
membership, cut its 2008 outlook citing higher medical costs,
stoking concerns that the problem could be industry wide.

Several brokerages downgraded WellPoint on the lowered
outlook and also cut their price targets on other stocks in the
sector.

"WellPoint could easily be considered somewhat of a broad
industry indicator...WellPoint opened up what we consider to be
the ultimate managed care earnings fear: rising medical costs,"
Bear Stearns analyst John Rex wrote in a note to clients.

Bear downgraded managed care sector to "market weight" from
"overweight." Goldman Sachs cut its view on the sector to
"neutral" from "attractive."

The magnitude of WellPoint's reduction to its earnings
outlook reflects a combination of company-specific pricing
error, as well as industry-wide pricing pressures, Goldman
Sachs analyst Matthew Borsch said.

WellPoint on Monday surprised analysts with the reduced
outlook citing weak enrollment, worsening economy and higher
medical costs.

"I don't want this to be viewed as an industry-wide trend
problem. I think there are some things that we need to do
better," WellPoint chief financial officer Wayne DeVeydt said
in a conference call on Monday.

Wachovia, which kept its "outperform" rating on the stock,
said this was the first time WellPoint lowered its
earning-per-share outlook since going public six years ago.
Following are the research actions by brokerages on
WellPoint:
Brokerages Action Current Prior
JP Morgan downgrade neutral overweight
Goldman Sachs downgrade neutral buy
Bear Stearns downgrade peer perform outperform
Stifel downgrade hold buy
Raymond James downgrade market perform outperform
Stifel downgrade hold buy
FTN Midwest downgrade neutral buy

cuts target $55 $93
UBS cuts target $75 $95
Citigroup cuts target $81 $110
Credit Suisse cuts target $64 $82
Oppenheimer cuts target $68 $96
Following are the research actions on other stocks in the
managed care sector:
Company Brokerage Price Target

Current Prior
Aetna (AET.N: Quote, Profile, Research) Citigroup $55 $66
Aetna (AET.N: Quote, Profile, Research) Goldman $48 $59
Cigna (CI.N: Quote, Profile, Research) Goldman $53 $60
Coventry Health (CVH.N: Quote, Profile, Research) Citigroup $70 $74
Coventry Health (CVH.N: Quote, Profile, Research) Goldman $52 $65
Health Net (HNT.N: Quote, Profile, Research) Citigroup $54 $60
Health Net (HNT.N: Quote, Profile, Research) Goldman $50 $58
Humana (HUM.N: Quote, Profile, Research) Citigroup $94 $95
Humana (HUM.N: Quote, Profile, Research) Goldman $69 $98
UnitedHealth Group (UNH.N: Quote, Profile, Research) Bear Stearns $49 $60
UnitedHealth Group (UNH.N: Quote, Profile, Research) Citigroup $70 $83
UnitedHealth Group (UNH.N: Quote, Profile, Research) Goldman $45 $55
(Reporting by Jennifer Robin Raj in Bangalore; Editing by
Deepak Kannan)