What analysts are saying: More Supervalu downgrades

  • Updated: July 21, 2012 - 3:03 PM
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The Supervalu Inc. logo is displayed on a truck at a distribution center in Hopkins, Minnesota on Monday, Jan. 9, 2012. Inventories at U.S. wholesalers rose 0.1 percent following a 1.2 percent revised gain in October, Commerce Department figures showed today in Washington. Photographer: Ariana Lindquist/Bloomberg

Photo: Ariana Lindquist, Dml - Bloomberg

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Credit analysts continue to downgrade Supervalu. On July 12 Fitch Ratings downgraded the big grocer. And last week, Standard & Poor's and Moody's Investors Service followed with their own downgrades.

Moody's downgraded Supervalu's overall debt rating to B3 and changed its outlook to "negative."

Moody's credit analyst Mickey Chadha wrote, "The company's recent announcement that it is exploring strategic alternatives to enhance shareholder value including the sale of all or part of the company adds further credence to Moody's opinion that management has been unable to improve the company's operating performance."

UNH SLIPS, RECOVERS

Shares of UnitedHealth fell nearly 5 percent on Thursday after CEO Stephen Hemsley delivered results for the second quarter.

Investors may have been wary of Hemsley's comments in a conference call on profit margins in its Medicare and Medicaid plans.

David Windley, an analyst with Jefferies & Co. in Nashville, told Bloomberg News: "There was enough discussion on the call about pricing and budget pressures to spook some folks."

Despite the pressures on Medicare and Medicaid programs, the company still increased its outlook for 2012 revenues and profits and raised the quarterly dividend by 31 percent.

Windley added, "I don't think it should be trading down, but it is."

Shares recovered somewhat, closing down only 2.4 percent on Thursday.

PATRICK KENNEDY

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