Analyst Joanna Gajuk of Bank of America Securities reiterated a Hold rating on Humana (HUM – Research Report), retaining the price target of $308.00.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Joanna Gajuk’s rating is based on a mix of factors, primarily revolving around Humana’s future projections and current market position. The company has projected a stable Medical Loss Ratio (MLR) for 2025, which is in contrast to most of its competitors who foresee an increase. This stability is achieved despite pressures from regulatory changes, business model adjustments, and strategic investments aimed at long-term benefits.
However, Humana’s insurance segment has experienced significant margin compression since 2019, creating uncertainties in earnings projections. The company’s pre-tax margins have dropped considerably, and while potential margin expansions could aid earnings per share, ongoing concerns about the impact of lower Star ratings and related legal challenges remain. These uncertainties, coupled with the mixed signals from consensus estimates, underpin the Hold rating, as future financial outcomes are difficult to predict with accuracy at this point.
Gajuk covers the Healthcare sector, focusing on stocks such as UnitedHealth, Humana, and Chemed. According to TipRanks, Gajuk has an average return of 1.1% and a 54.36% success rate on recommended stocks.
In another report released today, Morgan Stanley also reiterated a Hold rating on the stock with a $285.00 price target.