12:30 AM EDT, 04/03/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

Our 12-month target price of $326, cut $54, reflects a 14x multiple on our revised '25 EPS estimate. The applied multiple is below HUM's historical forward average, but merited in our view by a more challenging margin environment that we now see in '25. We keep our '24 EPS estimate at $16.00, but cut '25's by $2.75 to $23.25. The Center for Medicare and Medicaid Services (CMS) has finalized its CY25 average benchmark rate change for Medicare Advantage at -0.16%, below market expectations in our view, which we think had priced in a small increase. Shares of HUM dropped 13% today, and pain was felt elsewhere in managed care, such as with peers UnitedHealth (UNH 458 ***) and Elevance Health (ELV 499 ***), albeit to lesser degrees. We think multiples in managed care have already been compressing, and this surprise news could put HUM's margins under pressure. Managed care firms like HUM will have until early June to finalize benefits packages, and should begin marketing them in Fall 2024.