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Truist Securities lowered its price target on Humana (NYSE:HUM) to $280.00 from $305.00 on Tuesday, while maintaining a Hold rating on the health insurer’s shares. The company, currently valued at $29.37 billion, appears undervalued according to InvestingPro analysis, which identifies several positive indicators including strong cash position and attractive revenue valuation multiples.
The price target reduction reflects a lower assumed multiple for Humana stock, according to Truist. The firm made no changes to its rating or financial estimates for the company.
Humana hosted an Investor Day on Tuesday that Truist described as "upbeat," providing updates on the Medicare Advantage market’s ongoing attractiveness and strong trends in the company’s maturing Medicaid business.
The healthcare company outlined its growth strategy through 2028, highlighting opportunities in Individual Medicare Advantage, operating leverage, and expansion across other business segments including Medicaid, Centerwell, Group, PDP, and Specialty offerings.
Truist noted that Humana still faces challenges related to its Stars ratings and margin recovery back to levels above 3%, despite management presenting attractive growth and capital deployment opportunities during the investor presentation.
In other recent news, Humana has been in the spotlight following its Investor Day, where Mizuho (NYSE:MFG) reiterated an Outperform rating with a price target of $316.00. The company outlined a pathway to achieve approximately $40.00 in adjusted earnings per share by 2028, surpassing the current consensus estimate of $30.85. Cantor Fitzgerald maintained a Neutral rating with a $290.00 price target, noting the exclusion of Medicare Advantage cuts from a current bill, a positive development for Humana. This legislative decision aligns with Cantor Fitzgerald’s stance that Medicare Advantage programs will likely remain protected. Additionally, Humana is preparing its business plans with the assumption of losing its ongoing stars lawsuit, as revealed by CEO Jim Rechtin. The company is factoring in potential regulatory challenges in its long-term strategy. Bernstein also reiterated an Outperform rating, expecting the Investor Day to be a positive catalyst for the Medicare Advantage sector. The firm is looking for potential actions, such as pharmacy benefit manager outsourcing, to accelerate Humana’s earnings recovery.
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