Thursday’s trading session saw Humana Inc . (NYSE:HUM) shares receive an upgrade from Raymond James, with the firm changing its rating from Market Perform to Outperform. Currently trading at $262.24 with a market capitalization of $31.65 billion, the stock appears undervalued according to InvestingPro analysis. The revised rating comes along with a new price target set at $315.00, a significant endorsement following Humana’s first-quarter results for 2025, which surpassed expectations.
The healthcare company reported an adjusted earnings per share (EPS) of $11.58, which notably exceeded the Street’s forecast of $10.07 and Raymond James’ own estimate of $10.00. Humana’s medical loss ratio (MLR) was also a highlight, coming in at 87.4%, which was better than the guidance provided by management by 10 basis points (bps). According to Raymond James, much of the positive performance was attributed to the timing of general and administrative expenses (G&A) and a strong showing from Centerwell pharmacy, driven by a favorable drug mix.
Despite the robust first quarter, Humana’s management has decided to maintain its full-year earnings guidance, projecting an EPS of approximately $16.25. The rationale behind this decision is the anticipation of increased G&A investments impacting the second and third quarters of the year.
The upgrade by Raymond James was further justified by the analyst’s observation that the challenges faced by UnitedHealth Group (NYSE:UNH) appear to be more specific to that company. In contrast, Humana indicated that its Medicare Advantage costs are aligning with expectations, showing mid-single-digit growth, suggesting a more stable performance relative to its industry peer.
In other recent news, Humana Inc. reported its first-quarter 2025 earnings, which exceeded analysts’ expectations with an earnings per share (EPS) of $11.58, surpassing the forecasted $10.07. However, the company’s revenue slightly missed projections, coming in at $32.11 billion compared to the anticipated $32.22 billion. Despite the revenue shortfall, the earnings surprise underscores Humana’s effective cost management and strategic growth initiatives. The company reaffirmed its full-year adjusted EPS guidance of approximately $16.25, indicating confidence in its strategic direction. Humana also plans to expand its presence in 13 states and aims to achieve a 3% Medicare Advantage margin by 2027. The company’s performance was driven by strategic initiatives in the Medicare and Medicaid markets, along with improvements in operational efficiencies. Analysts from firms such as Cantor Fitzgerald and RBC Capital Markets inquired about the company’s strategic focus and future plans during the earnings call. Humana’s leadership emphasized their commitment to unlocking substantial value over the mid and long term.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.