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Research Alert: CFRA Maintains Hold Opinion On Shares Of Humana Inc.
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Research Alert: CFRA Maintains Hold Opinion On Shares Of Humana Inc.
Apr 24, 2024 11:49 AM

02:25 PM EDT, 04/24/2024 (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:

We lower our 12-month target price by $10 to $316, reflecting a 14x multiple of our 2025 EPS estimate (down $0.66 to $22.59), a discount to HUM's historical forward average. Following the recent CY25 Medicare Advantage (MA) average benchmark rate decline of 0.16%, HUM offered downbeat commentary regarding 2025. Given limited visibility into cost trends and membership growth, management seemed dubious about its prior guidance for $6 to $10 per share of incremental earnings growth. We anticipate a cut to 2025 guidance in the upcoming quarters. Positively, we raise our 2024 estimate by $0.13 to $16.13, supported by recent medical utilization trends, which were in line with HUM's expectations, and the company raising its MA membership growth guidance by 50k members (up to 150k from 100k). Q1 EPS of $7.23 vs. $9.38 beat consensus by $1.23. The adjusted benefits expense ratio (similar to MLR among peers) was 89.4%, well above the 86.4% mark in the prior-year quarter, but an improvement from 91.4% in Q4 2023.

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