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Louisville, Kentucky-based Humana Inc. (HUM) is one of the largest health insurance providers in the United States. With a market cap of $43.2 billion, Humana operates through Insurance and CenterWell segments.
Humana has substantially underperformed the broader market over the past year. Over the past 52 weeks, HUM stock has dipped 27%, lagging behind the S&P 500 Index’s ($SPX) 27.8% returns. In 2024 alone, HUM dipped 21.7% compared to SPX’s 17.8% gains on a YTD basis.
Narrowing the focus, HUM has also underperformed the S&P Healthcare Services SPDR’s (XHS) 8.4% returns over the past 52 weeks and 8.7% gains on a YTD basis.
Shares of Humana plummeted 10.6% following the release of its Q2 earnings on Jul. 31. Despite surpassing Wall Street’s EPS estimates by 18.2% to $6.96, it experienced a 22.2% annual decline. Additionally, Humana reduced its full-year EPS guidance to $12.81 from the previously announced $13.93, making investors jittery.
On a brighter note, the company reported a 10.4% annual revenue growth to $29.5 billion, exceeding analysts’ expectations. Moreover, HUM raised its guidance for individual Medicare Advantage annual membership growth by 75,000 to 225,000.
For the current fiscal year, ending in December, analysts expect Humana to report an EPS decline of 38.1% year over year to $16.15. The company’s earnings surprise history is mixed. It surpassed the EPS estimates in three of the past four quarters while missing on another occasion.
Among the 23 analysts covering the HUM stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” and 12 “Holds.”
This configuration is slightly more bullish than two months before, with nine analysts recommending a “Strong Buy.”
On Aug. 21, JP Morgan (JPM) analyst Lisa Gill maintained a “Neutral” rating with a price target of $396.
HUM’s mean price target of $390.36 represents a premium of 8.9% from current price levels. The Street-high target of $550 indicates a potential upside of 53.4%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
