Wells Fargo analyst Steve Baxter maintained a Buy rating on Humana (HUM – Research Report) yesterday and set a price target of $413.00.
Steve Baxter has given his Buy rating due to a combination of factors surrounding Humana’s stock (ticker HUM). Despite the initial negative reaction from the 2025 Medicare Advantage Advance Notice, which indicated rates ~160 basis points below Humana’s expectations, Baxter appears to maintain a positive outlook. His rationale may hinge on the belief that the Advance Notice is preliminary and that Humana, along with its peers, will be actively lobbying to improve the rates in the Final Rule. Historically, rates have tended to improve in the Final Rule compared to the Advance Notice, which supports a potential upside for Humana.
Furthermore, Baxter seems to consider Humana’s consistent guidance on its 2025 Adjusted Earnings Per Share (EPS) growth of $6 to $10 as a sign of stability, regardless of the preliminary rate announcement. This indicates a confidence in the company’s ability to manage through a potentially negative rate environment without altering its financial outlook significantly. Additionally, the historical average improvement in rates from the Advance Notice to the Final Rule suggests a precedent that could benefit Humana, reinforcing the Buy rating decision.
According to TipRanks, Baxter is a 2-star analyst with an average return of 0.0% and a 49.57% success rate. Baxter covers the Healthcare sector, focusing on stocks such as Humana, Cigna, and UnitedHealth.
In another report released on January 29, TD Cowen also maintained a Buy rating on the stock with a $427.00 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.
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