The stock of Humana (HUM), one of the largest U.S. health insurers, is down on news that the company’s chief financial officer (CFO), Susan Diamond, is stepping down.
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Diamond is being replaced in the CFO role by Celeste Mellet, who will take over on January 11 of next year. Mellet, age 48, currently serves as CFO of infrastructure fund manager Global Infrastructure Partners, and has previously worked in a similar position at financial firms Evercore (EVR) and Fannie Mae (FNMA).
The change in the CFO role comes after Humana earlier this year withdrew its 2025 profit forecast due to disappointing government Medicare reimbursement rates. The shift also comes after CEO Jim Rechtin assumed the helm of Humana in July of this year.
Advisory Role
Diamond, age 51, who is leaving Humana following an 18-year career at the insurer, including three years as CFO, will serve in an advisory role through the end of 2025, said the company in a statement. Michael Wiederhorn, a five-star rated analyst at Oppenheimer (OPY), said in a note to clients that the CFO change at Humana is not a, “total surprise, especially given the backdrop of the recent CEO change.”
Humana depends heavily on government-backed Medicare Advantage and has struggled as post-pandemic medical claims have risen sharply, especially among elderly people, and government reimbursements to help cover those costs are steadily reduced.
HUM stock is down about 1% on news of the CFO change. So far in 2024, the company’s share price has declined 35%.
Is HUM Stock a Buy?
The stock of Humana has a consensus Moderate Buy rating among 22 Wall Street analysts. That rating is based on six Buy, 16 Hold, and no Sell recommendations made in the last three months. The average HUM price target of $285.72 implies 2.77% downside risk from current levels.
