UPDATE: J.P. Morgan Lowers PT on Medco Health Solutions

J.P. Morgan is out with its report today on Medco Health Solutions (NYSE: MHS), lowering its PT from $78 to $73.

In a note to clients, J.P. Morgan writes, "We maintain our Overweight rating on MHS following the loss of the FEP mail contract. While we view the 9% decline as an overreaction, shares are likely to remain range-bound near term, although we believe valuation remains very attractive (~12x FY12 EPS), especially given the removal of a large overhang. Importantly, we point to opportunities to ramp down costs associated with FEP, we don't expect a loss of purchasing leverage, and we expect Medco to maintain its pricing discipline over the remainder of the selling season. We are lowering our FY12 EPS estimate to $4.72 from $5.00 and our target price to $73 from $78."

Shares of MHS closed Friday at $58.66, down 8.97% from Thursday's close.