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UBS maintained its Neutral rating and $285.00 price target on Humana stock (NYSE: NYSE:HUM), currently trading at $243.57, following the company’s investor day at its Louisville headquarters. According to InvestingPro data, analyst targets range from $244 to $402, with the stock currently appearing undervalued based on Fair Value analysis. The health insurer presented a framework for long-term earnings that suggests EPS could reach $36-44 by 2028, significantly above current UBS and consensus estimates of $23.00 and $26.28, respectively. The company has demonstrated strong financial health, earning a "GREAT" overall score from InvestingPro, with particularly robust scores in profitability and relative value metrics.
The company’s growth strategy includes projected earnings increases of $1.0-1.4 billion from Individual Medicare Advantage, $0.3-0.4 billion from growth businesses including Medicaid and Centerwell, and $0.4-0.6 billion from other business lines between 2025 and 2028.
Humana also expects to generate $1.6-2.0 billion from enterprise operating leverage, with more than half coming from cost reductions and the remainder from revenue growth. The company projects achieving top quartile Stars performance by 2028, despite facing headwinds in 2026 and 2027.
This performance would translate to Stars revenue per member per month approximately 10% above peer group averages, though still below 2025 levels. The company did not provide explicit EPS targets during the presentation.
UBS noted that while the earnings framework helps outline Humana’s potential, several questions remain unresolved, including 2026 bidding strategy, competitive dynamics, and utilization trends in the healthcare market. For deeper insights into Humana’s financial outlook and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively on InvestingPro, which covers key metrics and expert analysis for informed decision-making.
In other recent news, Humana outlined its growth strategy during an Investor Day, projecting a pathway to achieve approximately $40.00 in adjusted earnings per share by 2028, significantly above the current consensus estimate of $30.85. Mizuho (NYSE:MFG) responded positively to this roadmap, maintaining an Outperform rating with a $316.00 price target, reflecting confidence in Humana’s long-term strategy despite anticipated short-term earnings declines in 2026. Truist Securities, however, lowered its price target for Humana to $280.00 from $305.00, citing a lower assumed multiple, while maintaining a Hold rating. Cantor Fitzgerald also maintained its Neutral rating and a $290.00 price target, noting the exclusion of Medicare Advantage cuts from a current bill as a favorable development for Humana. This legislative aspect was also highlighted by CVS Health (NYSE:CVS)’s positive outlook, as limits on Medicare Pharmacy Benefit Managers were removed from a tax bill, benefiting companies like Humana with significant Medicare Advantage operations. Additionally, Humana’s CEO Jim Rechtin mentioned that the company is planning with the assumption of losing its ongoing stars lawsuit, indicating a conservative approach in its business strategy. Despite these challenges, Humana’s long-term growth strategy focuses on margin recovery in Medicare Advantage and expansion in Medicaid and CenterWell services. The healthcare company is also addressing potential issues with Medicare Star ratings, which affect reimbursement rates, as part of its comprehensive business plan through 2028.
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