Goldman Sachs Upgrades Humana (HUM) to Buy

December 13, 2022 6:39 AM EST
Get Alerts HUM Hot Sheet
Price: $491.98 -0.65%

Rating Summary:
    20 Buy, 12 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 22 | Down: 20 | New: 31
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(Updated - December 13, 2022 6:40 AM EST)

Goldman Sachs analyst Nathan Rich upgraded Humana (NYSE: HUM) from Neutral to Buy with a price target of $652.00.

The analyst comments "We see a strengthening earnings outlook as improved competitive positioning in MA has reaccelerated member growth for 2023 and could deliver multiple years of share gains as many peers face Stars headwinds in 2024. We also see an attractive and still underappreciated HC services opportunity, with primary care earnings having potential to outperform guidance given at its Sept. investor day. We are mindful of the notable risk associated with the upcoming RADV ruling. We are 4% above consensus EPS for 2024-2025, reflecting 3% higher member growth and a 2025 primary care EBITDA opportunity of $205mn-$395mn in EBITDA based on our waterfall estimates, above the company’s $100-$200mn outlook in its mid-term guidance, with more of this EBITDA hitting the P&L as WCAS centers come onto the balance sheet. Despite the stock’s outperformance in 2022 (+18% YTD vs. MCO group +13%), the stock trades in-line with its historical median despite higher forward EPS CAGR of 15% vs. its 3-yr. history of 12%."

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 $529.99 yesterday.

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