Leerink Partners Reiterates Outperform on Humana (HUM) Following Management Meetings

Leerink Partners reiterated an Outperform rating and $230.00 price target on Humana (NYSE: HUM) after meeting with management. The company continues to enjoy solid performance in Medicare Advantage as both utilization and favorable prior period reserve development outpaces their estimates, with the potential for upside to the guided margins in the 3.5-3.9% range. The CFO also expressed continued confidence in close of the AET transaction by 2H16 in contrast to the change in narrative from CI in their 10Q in this regard.

Analyst Ana Gupte commented, "Our meetings with CFO Brian Kane and VP IR Regina Nethery on May 17 give us continued conviction in our OP rating on the name. We reiterate a PT of $230 based on upside from our expectation of 80% probability of deal close with AET by 2H16. In the lower probability event that the deal breaks, downside risk is mitigated by good MA fundamentals, potential to further rationalize the money losing Exchange portfolio in 2017 and excess free cash at the parent for a meaningfully higher share repurchase of as much as $2.3B with $500MM still left at the parent."

For an analyst ratings summary and ratings history on Humana click here. For more ratings news on Humana click here.

Shares of Humana closed at $170.22 yesterday.

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