Analyst Stephen Baxter from Wells Fargo maintained a Buy rating on Humana (HUM – Research Report) and keeping the price target at $337.00.
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Stephen Baxter has given his Buy rating due to a combination of factors, including Humana’s consistent earnings guidance and strategic adjustments. The company’s Q4 results were as anticipated, and the guidance for 2025 EPS aligns with previous expectations, indicating stability in its financial performance. Despite some challenges with membership mix, the company has been proactive in addressing issues by exiting unprofitable plans and making beneficial changes in continuing markets, which could support future profitability.
Furthermore, Humana is making progress in Medicaid margin improvements and remains optimistic about its Part D assumptions. Although the decrease in membership numbers presents a concern, the impact is mitigated by the loss occurring in plans with less favorable starting margins. Despite the uncertainties surrounding Star Ratings, the analyst remains optimistic about the company’s ability to navigate these challenges and improve its Medicare Advantage rate backdrop, supporting the Buy recommendation.