Humana Emerges as a Top Value Play Amidst Stock Decline
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
- Value Score Surge: Humana's value score increased from 77.65 to 86.97, indicating attractive pricing relative to fundamental earnings, assets, and sales, despite a 26.64% year-to-date stock decline.
- Operational Efficiency Risks: While the value score has improved, Humana's momentum score remains low at 6.22, and its quality score is at 20.20, reflecting poor operational efficiency compared to historical profitability, which could impact future earnings.
- Impact of Payment Proposal: The CMS's proposal to increase net average payments by only 0.09% for 2027 starkly missed Wall Street's expectations of 4% to 6%, with analysts describing it as a “shock to the system” that may delay sector recovery until 2026.
- Earnings Outlook Warning: Analysts warn of a potential 15-20% hit to earnings if payment rates are finalized in April without adjustments, although the current value score suggests an entry point for contrarian investors.
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Analyst Views on HUM
Wall Street analysts forecast HUM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for HUM is 290.39 USD with a low forecast of 231.00 USD and a high forecast of 344.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
6 Buy
12 Hold
1 Sell
Moderate Buy
Current: 196.670
Low
231.00
Averages
290.39
High
344.00
Current: 196.670
Low
231.00
Averages
290.39
High
344.00
About HUM
Humana Inc. provides Humana insurance services and CenterWell health care services. The Company's segments include Insurance and CenterWell. The Insurance segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts, as well as its contract with CMS to administer the Limited Income Newly Eligible Transition (LI-NET) prescription drug plan program and contracts with various states to provide Medicaid, dual eligible demonstration, and Long-Term Support Services benefits. This segment also includes products consisting of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups. The CenterWell segment includes its pharmacy, primary care, and home solutions operations. The segment also includes its strategic partnerships with WCAS to develop and operate senior-focused, payor-agnostic, primary care centers, as well as its minority ownership interest in hospice operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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