What Happened?
Shares of health insurance company Humana (NYSE: HUM) jumped 1.8% in the afternoon session after Bank of America Securities raised its price target for the company. The firm maintained its "Neutral" rating on Humana but increased its price target to $312 from $285, representing a potential 9.5% upside from the previous target. This analyst action follows other recent positive developments for the healthcare company. In late August, Humana announced new value-based care partnerships with Vori Health and HOPCo. These partnerships are aimed at expanding individualized musculoskeletal care for its Medicare Advantage members, signaling continued efforts to enhance its service offerings.
After the initial pop the shares cooled down to $309.83, up 2% from previous close.
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What Is The Market Telling Us
Humana’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 15.3% on the news that peer UnitedHealth reported underwhelming first-quarter 2025 results as its sales and profits fell below Wall Street expectations. Guidance was the biggest concern. The new full-year earnings forecast came in well below what analysts had been expecting, mainly because the company saw its care (medical costs in its privately run Medicare plans) and funding issues lasting longer. The news cast a shadow over other health insurers with similar offerings, hinting at tighter margins and more uncertainty ahead.
Humana is up 22.6% since the beginning of the year, but at $309.83 per share, it is still trading 16.6% below its 52-week high of $371.40 from September 2024. Investors who bought $1,000 worth of Humana’s shares 5 years ago would now be looking at an investment worth $724.29.
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