Aetna shares were down more than 8% in after-hours trading this morning, after the company said higher health costs are likely to take a bite out of its profits this year. Here’s the story from the WSJ . While some analysts suggested the lower earnings had already been priced into the stock, others quickly downgraded the company. Here are a few samples from the analysts’ notes: Gregory K. Nersessian of Credit Suisse lowered his rating on the company to underperform, noting that the lower profits might require the company to strengthen its reserves. “We expect another shoe to drop in the form of a negative guidance revision and reserve charge,” he

wrote. Wachovia’s Matt Perry downgraded the company to market perform, arguing that Aetna may not be able to continue to bring in higher profit margins than its competitors: “We are concerned that industry-wide margin pressure that hit most of the sector in 2008, has caught up with Aetna in 2009.” Michael J. Baker of Raymond James also downgraded Aetna to market perform, citing the declining reserve cushion as well as pressure that could drive down the administrative fees the company charges. “We believe the earnings revision will likely prove to be too optimistic,” he wrote.

Read more here: 
As Health Costs Bite Aetna, Analysts Downgrade Stock