Humana’s Strong Q1 2025 Performance and Strategic Positioning Justify Buy Rating Amid Star Ratings Challenges

Humana (HUM – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Stephen Baxter from Wells Fargo reiterated a Buy rating on the stock and has a $348.00 price target.

Stephen Baxter has given his Buy rating due to a combination of factors including Humana’s strong performance in the first quarter of 2025 and the company’s ability to maintain its guidance for the year. The favorable medical loss ratio and stable cost trends have contributed positively to the company’s outlook. Moreover, the anticipated improvement in Medicare Advantage reimbursement rates for 2026 is expected to enhance Humana’s earnings potential, despite potential challenges from changes in star ratings.
Even though Humana faces headwinds from star ratings adjustments, Baxter believes that the company’s strategic positioning, particularly its county-level exposure, will allow it to outperform industry averages in 2026. The potential for Humana to mitigate earnings pressure through benefit reductions or membership migration to higher-rated contracts also supports the Buy rating. Additionally, the possibility of a favorable outcome in Humana’s legal challenge regarding star ratings could further bolster its earnings, making the stock an attractive investment opportunity.

In another report released on May 1, Raymond James also upgraded the stock to a Buy with a $315.00 price target.

HUM’s price has also changed moderately for the past six months – from $288.510 to $251.770, which is a -12.73% drop .