Humana’s Hold Rating: Balancing Positive EPS Guidance with Legal and Margin Uncertainties

Ryan Langston, an analyst from TD Cowen, maintained the Hold rating on Humana (HUM – Research Report). The associated price target is $268.00.

Ryan Langston has given his Hold rating due to a combination of factors surrounding Humana’s current financial outlook and potential future developments. The company has maintained its earnings per share (EPS) guidance for 2025 at approximately $16.25, with investments planned to enhance margins and recapture Stars ratings. Despite the positive adjustments in the 2026 EPS estimate due to a finalized Medicare Advantage rate notice, the uncertainty surrounding the outcome of the Stars lawsuit poses a significant risk, influencing the Hold rating.
Additionally, while Humana’s first-quarter results exceeded management’s expectations, largely due to favorable drug mix and timing of investments, the company faces challenges in achieving its 3% Medicare Advantage margin target. This goal’s realization is contingent on the outcomes of ongoing legal proceedings and future Star ratings performance. The upcoming investor day is expected to provide further insights into the company’s earning potential and strategic initiatives, but the wide range of possible outcomes, particularly concerning the lawsuit, justifies the cautious Hold stance.

In another report released today, Barclays also maintained a Hold rating on the stock with a $322.00 price target.