Humana (HUM) Lifted to “Buy” at Zacks Investment Research

Humana (NYSE:HUM) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research report issued to clients and investors on Monday. The brokerage presently has a $294.00 price objective on the insurance provider’s stock. Zacks Investment Research‘s price objective points to a potential upside of 9.60% from the company’s previous close.

According to Zacks, “Humana’s fourth-quarter 2017 earnings per share of $2.06 beat the Zacks Consensus Estimate but declined 12% year over year due to higher benefit expenses. Following decent 2017 results, the company provided strong guidance for 2018. Its shares have outperformed the industry in last three months.  Humana is well poised to grow on its strong government business. Its top line has been witnessing an uptrend for past many years. Sufficient generation of cash flow has helped the company take up several capital deployment initiatives aimed at enhancing shareholders’ value. Humana’s sound balance sheet and disciplined capital management remain major tailwinds. However, the company's individual commercial business has remained a drag over past few years. Rising level of expenses also continues to weigh on the bottom line.”

Several other brokerages also recently issued reports on HUM. Leerink Swann raised their price target on Humana from $280.00 to $300.00 and gave the stock an “outperform” rating in a report on Thursday. Credit Suisse Group cut their price target on Humana from $256.00 to $246.00 and set a “neutral” rating on the stock in a report on Friday, November 10th. ValuEngine downgraded Humana from a “buy” rating to a “hold” rating in a report on Tuesday, December 19th. BMO Capital Markets initiated coverage on Humana in a report on Monday, October 16th. They issued an “outperform” rating and a $300.00 price target on the stock. Finally, Cantor Fitzgerald reissued a “hold” rating and issued a $250.00 price target on shares of Humana in a report on Wednesday, February 7th. Seven equities research analysts have rated the stock with a hold rating and fifteen have assigned a buy rating to the company’s stock. The company currently has an average rating of “Buy” and a consensus price target of $270.47.

Shares of Humana (NYSE HUM) traded up $2.94 during midday trading on Monday, hitting $268.26. The company had a trading volume of 53,864 shares, compared to its average volume of 1,200,095. The company has a market cap of $36,528.92, a P/E ratio of 15.91, a price-to-earnings-growth ratio of 1.44 and a beta of 0.93. Humana has a 1-year low of $203.36 and a 1-year high of $293.35. The company has a current ratio of 1.85, a quick ratio of 1.61 and a debt-to-equity ratio of 0.48.

Humana (NYSE:HUM) last announced its quarterly earnings results on Wednesday, February 7th. The insurance provider reported $2.06 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.00 by $0.06. The business had revenue of $13.19 billion for the quarter, compared to the consensus estimate of $13.14 billion. Humana had a return on equity of 16.13% and a net margin of 4.55%. The business’s revenue was up 2.4% on a year-over-year basis. During the same quarter last year, the business posted $2.34 EPS. equities research analysts forecast that Humana will post 13.85 earnings per share for the current year.

Humana announced that its board has approved a stock repurchase plan on Thursday, December 14th that allows the company to repurchase $3.00 billion in outstanding shares. This repurchase authorization allows the insurance provider to repurchase shares of its stock through open market purchases. Stock repurchase plans are often an indication that the company’s board of directors believes its shares are undervalued.

In other news, SVP Brian P. Leclaire sold 1,679 shares of Humana stock in a transaction on Thursday, December 21st. The stock was sold at an average price of $245.97, for a total transaction of $412,983.63. Following the transaction, the senior vice president now directly owns 9,888 shares in the company, valued at approximately $2,432,151.36. The sale was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, VP Timothy S. Huval sold 1,382 shares of Humana stock in a transaction on Tuesday, December 19th. The shares were sold at an average price of $246.04, for a total value of $340,027.28. Following the transaction, the vice president now owns 11,557 shares in the company, valued at $2,843,484.28. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 10,115 shares of company stock worth $2,501,627. 0.80% of the stock is owned by insiders.

Several hedge funds have recently modified their holdings of HUM. Janus Henderson Group PLC grew its holdings in shares of Humana by 74.1% in the 3rd quarter. Janus Henderson Group PLC now owns 2,729,248 shares of the insurance provider’s stock worth $664,921,000 after acquiring an additional 1,161,661 shares during the last quarter. Wells Fargo & Company MN grew its holdings in shares of Humana by 11.4% in the 4th quarter. Wells Fargo & Company MN now owns 1,842,029 shares of the insurance provider’s stock worth $456,951,000 after acquiring an additional 188,711 shares during the last quarter. Ameriprise Financial Inc. grew its holdings in shares of Humana by 10.8% in the 3rd quarter. Ameriprise Financial Inc. now owns 1,465,119 shares of the insurance provider’s stock worth $356,960,000 after acquiring an additional 142,706 shares during the last quarter. Acadian Asset Management LLC grew its holdings in shares of Humana by 3.0% in the 4th quarter. Acadian Asset Management LLC now owns 1,043,303 shares of the insurance provider’s stock worth $258,809,000 after acquiring an additional 30,812 shares during the last quarter. Finally, Capital International Investors boosted its position in shares of Humana by 8.8% in the third quarter. Capital International Investors now owns 760,500 shares of the insurance provider’s stock worth $185,281,000 after buying an additional 61,500 shares during the period. Institutional investors own 94.13% of the company’s stock.

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About Humana

Humana Inc is a health and well-being company. The Company’s segments include Retail, Group and Specialty, Healthcare Services and Individual Commercial. The Retail segment consists of Medicare benefits, as well as individual commercial fully insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products.

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