Buy Rating Affirmed for Humana Despite Earnings Forecast Adjustment: Growth and Fundamentals Remain Strong

Ann Hynes, an analyst from Mizuho Securities, maintained the Buy rating on Humana (HUM – Research Report). The associated price target was lowered to $385.00.

Ann Hynes’s rating is based on a thorough analysis that takes into account both current performance and future expectations for Humana. Despite a reduction in the earnings forecast for the years 2025 and 2026, the rationale behind the Buy rating lies in the anticipation of continued growth in the coming years. Hynes’s confidence is bolstered by the belief that the downward adjustment in estimates represents a shift in the timeline of profitability rather than underlying business deterioration. It’s important to note that the conservative guidance provided by Humana may even result in better-than-expected performance if utilization trends align favorably.
Furthermore, factors such as Humana’s confirmation of expected growth in adjusted earnings per share for 2025, even after withdrawing their guidance, contribute to the positive outlook. The report highlights that, despite market uncertainties, the fundamentals of the company remain strong. Hynes also points out that Humana’s increased membership growth projections for its individual Medicare Advantage plans in 2024, coupled with robust share repurchase activity in the first quarter, are promising signs. These elements collectively underpin the maintenance of the $385 price target and support the Buy rating.

Hynes covers the Healthcare sector, focusing on stocks such as Cigna, Humana, and Icon. According to TipRanks, Hynes has an average return of 7.6% and a 60.16% success rate on recommended stocks.

In another report released yesterday, Oppenheimer also maintained a Buy rating on the stock with a $370.00 price target.

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Humana (HUM) Company Description:

Humana Inc. is a leading health insurance service provider in the United States. The company, through its Retail division, provides medicare benefits and state-based medicaid contracts, which are marketed on a retail basis to individuals. The Group and Specialty business offers employer group commercial fully-insured medical products and specialty health insurance benefits. Humana offers pharmacy solutions, provider services, home-based services, and clinical programs to the company’s health plan members as well as to third parties through the Healthcare Services segment.