Bernstein analyst Lance Wilkes upgrades $Humana (HUM.US)$ to a buy rating, and adjusts the target price from $405 to $308.
According to TipRanks data, the analyst has a success rate of 71.7% and a total average return of 14.3% over the past year.
Furthermore, according to the comprehensive report, the opinions of $Humana (HUM.US)$'s main analysts recently are as follows:
The assessment of Humana's financial outlook has seen a revision, with expectations for FY26 EPS being adjusted following the company's recent 8-K, which highlighted a decline in star ratings based on preliminary Medicare Advantage performance data. Nevertheless, the current valuation takes into account the company's mitigation initiatives planned for 2027, as well as the possible positive outcomes from pending appeals.
Despite Humana's capability to annually reprice its Medicare Advantage plans and the potential to enhance star ratings each year, the company's overall path to recovery is now perceived as overly complex. The timeline for regaining normalized margins could extend past 2027 unless there are effective appeals for star ratings.
The most significant factor for Humana is the Medicare Advantage stars appeal. While the company's third quarter performance is satisfactory, an unsuccessful appeal is being factored into forecasts, which suggests that even projected 2027 earnings per share may not surpass those of 2024.
Note:
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Success rate is the number of the analyst's successful ratings, divided by his/her total number of ratings over the past year. A successful rating is one based on if TipRanks' virtual portfolio earned a positive return from the stock. Total average return is the average rate of return that the TipRanks' virtual portfolio has earned over the past year. These portfolios are established based on the analyst's preliminary rating and are adjusted according to the changes in the rating.
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