Humana Shares Drop Despite Analyst Price Target

Humana's stock fell 5.53% despite strong Q1 earnings and revenue growth. Analysts remain bullish, but the company faces profitability challenges in the healthcare industry.

Trim Correspondents
New Update
Humana Shares Drop Despite Analyst Price Target

Humana Shares Drop Despite Analyst Price Target

Shares of Humana Inc. (NYSE:HUM) fell 5.53% to $309.86 on Tuesday, despite a consensus price target of $535.44 from Wall Street analysts. The healthcare company, which has a market valuation of $37.35 billion, is anticipated to report a 34.80% decrease in revenue for the current quarter.

In the previous quarter, Humana reported earnings per share (EPS) of $7.23, surpassing analysts' consensus estimate of $6.12 by $1.11. The firm had revenue of $29.61 billion for the quarter, compared to analyst estimates of $28.52 billion, signifying a 10.7% increase year-over-year. Humana's earnings are projected to grow by 42.34% in the coming year, from $16.06 to $22.86 per share.

The drop in Humana's share price occurs despite the company's recent financial performance, including revenue growth, earnings increases, and successful debt offerings. Humana has also been involved in various initiatives, such as enhancing healthcare for U.S. veteran seniors, improving provider directories, and advancing regional health equity. However, the company has encountered difficulties in reaching profitability in recent quarters.

Why this matters: Humana's stock performance and financial outlook have implications for the broader healthcare industry and investors. The company's initiatives and challenges reflect the ongoing efforts to improve healthcare access and quality while navigating market pressures.

Several analysts have adjusted their price targets for Humana, with RBC Capital lowering it to $353 from $415 while maintaining an Outperform rating, and Cantor Fitzgerald lowering it to $360 from $391 while maintaining a Neutral rating. Humana recently reported better-than-expected earnings and revenue for the fiscal Q1 2024, with EPS of $7.23. The company also declared a quarterly dividend of $0.885 per share, payable on July 26, 2024.

Key Takeaways

  • Humana's stock fell 5.53% despite analysts' $535.44 price target.
  • Humana reported Q1 2024 EPS of $7.23, exceeding estimates by $1.11.
  • Humana's revenue grew 10.7% YoY, but earnings are projected to decline 34.8% in Q2.
  • Analysts lowered Humana's price targets to $353 and $360 from $415 and $391.
  • Humana declared a $0.885 quarterly dividend payable on July 26, 2024.