Humana Faces Earnings Forecasts Amid Market Challenges
With a market cap of $31.6 billion, Humana Inc. (HUM) stands out as a significant player in the U.S. healthcare insurance market, providing a diverse array of medical and specialty insurance products. In addition to its insurance offerings, Humana also provides pharmacy solutions and various health care services, including senior-focused primary care, home health, and hospice care. Based in Louisville, Kentucky, the company is set to announce its fiscal Q4 earnings results after market close on Thursday, Jan. 23.
Analyst Expectations and Recent Performance
Analysts predict that the health insurer will report a loss of $2.23 per share, a substantial decrease from the $0.11 loss per share recorded in the same quarter last year. This could indicate ongoing challenges for the company, although HUM has beaten Wall Street’s bottom-line estimates in three of the last four quarters. In the latest quarter, HUM posted an impressive 19.5% margin above consensus EPS estimates.
Fiscal 2024 Projections
For fiscal 2024, analysts estimate an EPS of $16.14 for HUM, which represents a 38.1% drop from $26.09 in fiscal 2023. However, a projected recovery follows, with a forecasted 3.4% year-over-year growth reaching an EPS of $16.68.
Stock Performance Over the Past Year
In the past year, HUM has fallen by 43.5%, performing worse than the S&P 500 Index’s ($SPX) 26.3% gain and the iShares U.S. Healthcare Providers ETF’s (IHF) 8.2% drop.
Recent Gains and Long-term Outlook
On October 30, Humana’s shares increased by 3.3% thanks to a strong Q3 performance that featured an adjusted EPS of $4.16, well above analyst expectations. Additionally, the company’s revenue of $29.3 billion reflected a year-over-year increase of 14.8%, driven by rising Medicare premiums and growth in Medicare Advantage memberships. Humana has also raised its 2024 expectations for Medicare Advantage membership growth to 265,000, indicating improved retention and sales. Furthermore, the company reiterated its adjusted EPS guidance of at least $16 for 2024, showing confidence despite potential impacts from 2025 MA Star ratings.
Analysts’ Consensus and Future Price Target
The consensus view from analysts on HUM stock remains cautiously optimistic, currently rated as a “Moderate Buy.” Among 24 analysts monitoring the stock, six suggest a “Strong Buy,” one recommends a “Moderate Buy,” and 17 advocate a “Hold.” This marks a slight reduction in bullishness compared to three months ago, when there were seven “Strong Buy” ratings. The average price target set by analysts for HUM is $286, indicating a potential upside of nearly 9% from current levels.
On the date of publication, Sohini Mondal 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
