Louisville, Kentucky – Humana, a leading health insurance provider, faces a challenging time ahead as analysts adjust their stock price targets following the company’s first-quarter earnings report. Despite reporting earnings of $7.23 per share, which surpassed expectations, the company withdrew its profit forecast for 2025 due to disappointing government Medicare reimbursement rates.
Humana’s revenue for the first quarter totaled $29.61 billion, exceeding Wall Street’s expectations. However, the company’s decision to pull its 2025 profit forecast caused its shares to drop by 2.24% to $308.91.
CEO Bruce Broussard acknowledged the dynamic and challenging environment the industry is facing but expressed confidence in Humana’s ability to compete in the Medicare Advantage market. He highlighted the negative impact of Medicare reimbursement rates on benefit levels for seniors, emphasizing the need for stability and choice in the industry.
Following the earnings report, several Wall Street analysts adjusted their stock price targets for Humana. Oppenheimer analyst Michael Wiederhorn lowered the price target to $370, highlighting the company’s strong performance in the first quarter and its commitment to maintaining full-year guidance.
Looking ahead, management at Humana revised its growth guidance for 2025 due to rate pressures and Total Beneficiary Cost limitations. Despite challenges in the Medicare Advantage sector, the company remains optimistic about its long-term margin growth potential.
RBC Capital and Cantor Fitzgerald also adjusted their price targets for Humana, reflecting the company’s updated outlook and commitment to margin improvement. Jefferies analyst David Windley suggested that Cigna Group could revisit its plan to acquire Humana given the recent changes in stock prices, making a potential deal more financially feasible.
Overall, analysts believe that Humana’s performance in the first quarter and its strategic outlook for the future position the company well in the competitive healthcare market. Despite industry challenges, Humana’s strong fundamentals and growth prospects continue to garner investor attention.