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RBC Capital maintained its Outperform rating and $283.00 price target on Humana stock (NYSE:HUM) following the company’s 2025 Investor Conference. The decision reflects RBC’s confidence in Humana’s long-term earnings growth strategy despite near-term challenges. According to InvestingPro data, Humana, currently trading at $243.08 with a market cap of $29.35B, appears undervalued based on its Fair Value analysis.
RBC noted that Humana is prioritizing long-term earnings growth over immediate margin recovery as the company navigates through Stars rating headwinds. While Humana did not provide specific guidance, RBC believes management comments suggest 2028 earnings per share could reach approximately $38-42, including Stars bonus payments. The company’s solid financial foundation is evident in its 10.09% revenue growth and healthy P/E ratio of 17.19.
The healthcare company faces an uneven earnings trajectory due to anticipated Stars headwinds in 2026 and 2027. Despite these challenges, Humana expects its Medicare Advantage margins, excluding Stars impacts, to improve through 2028. The company maintains a strong financial position with a GREAT overall health score and has consistently paid dividends, currently yielding 1.5%.
RBC’s maintained price target reflects its assessment of Humana’s growth potential despite the expected volatility in earnings performance over the coming years. The firm’s Outperform rating indicates confidence that Humana’s strategy will deliver value over the longer term.
The healthcare insurer continues to focus on multiple growth levers to drive strong earnings per share growth by 2028, according to RBC’s analysis of management’s investor conference presentation.
In other recent news, Humana presented a promising outlook during its Investor Day, projecting earnings per share (EPS) to reach $36-44 by 2028, significantly above current estimates. The company highlighted growth strategies involving Individual Medicare Advantage and other business lines, along with leveraging enterprise operating efficiency. Despite this optimistic projection, UBS maintained a neutral rating, citing unresolved questions about Humana’s future strategies and market dynamics. Similarly, Truist Securities adjusted its price target to $280.00, maintaining a hold rating, reflecting a revised valuation model. Mizuho (NYSE:MFG), however, reiterated an outperform rating with a $316.00 price target, expressing confidence in Humana’s long-term strategy despite short-term challenges.
Cantor Fitzgerald maintained its neutral rating with a $290.00 price target, noting that potential Medicare Advantage cuts were excluded from current legislative considerations, a positive development for Humana. The exclusion was anticipated, yet it alleviated some uncertainty surrounding Humana’s revenue prospects. The company’s strategic focus remains on expanding its Medicare Advantage margins and growth in Medicaid and CenterWell services. These recent developments collectively paint a complex picture of Humana’s future, with varied analyst perspectives highlighting both opportunities and challenges.
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