Humana (HUM) Raised to “Buy” at Zacks Investment Research
Zacks Investment Research upgraded shares of Humana (NYSE:HUM) from a hold rating to a buy rating in a report issued on Monday. They currently have $294.00 target price on the insurance provider’s stock.
According to Zacks, “Humana’s fourth-quarter 2017 earnings per share of $2.06 beat the Zacks Consensus Estimate but declined 12% year over year due to higher benefit expenses. Following decent 2017 results, the company provided strong guidance for 2018. Its shares have outperformed the industry in last three months. Humana is well poised to grow on its strong government business. Its top line has been witnessing an uptrend for past many years. Sufficient generation of cash flow has helped the company take up several capital deployment initiatives aimed at enhancing shareholders’ value. Humana’s sound balance sheet and disciplined capital management remain major tailwinds. However, the company's individual commercial business has remained a drag over past few years. Rising level of expenses also continues to weigh on the bottom line.”
Several other analysts have also recently commented on the company. BMO Capital Markets boosted their price target on Humana from $290.00 to $300.00 and gave the stock an outperform rating in a research report on Friday, November 10th. Cowen restated a buy rating and issued a $285.00 target price on shares of Humana in a report on Wednesday, December 13th. Royal Bank of Canada restated a sector perform rating and issued a $242.00 target price (down from $245.00) on shares of Humana in a report on Thursday, November 9th. Credit Suisse Group dropped their target price on Humana from $256.00 to $246.00 and set a neutral rating for the company in a report on Friday, November 10th. Finally, Cantor Fitzgerald restated a hold rating and issued a $230.00 target price on shares of Humana in a report on Tuesday, December 5th. Seven equities research analysts have rated the stock with a hold rating and fifteen have assigned a buy rating to the stock. Humana currently has a consensus rating of Buy and a consensus target price of $270.47.
Humana (NYSE:HUM) last issued its quarterly earnings results on Wednesday, February 7th. The insurance provider reported $2.06 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $2.00 by $0.06. Humana had a return on equity of 16.13% and a net margin of 4.55%. The firm had revenue of $13.19 billion during the quarter, compared to analysts’ expectations of $13.14 billion. During the same period in the previous year, the business earned $2.34 earnings per share. The firm’s revenue for the quarter was up 2.4% on a year-over-year basis. analysts predict that Humana will post 13.84 EPS for the current fiscal year.
The firm also recently declared a quarterly dividend, which will be paid on Friday, April 27th. Stockholders of record on Friday, March 30th will be issued a dividend of $0.50 per share. The ex-dividend date is Wednesday, March 28th. This is a boost from Humana’s previous quarterly dividend of $0.40. This represents a $2.00 dividend on an annualized basis and a dividend yield of 0.75%. Humana’s dividend payout ratio is currently 9.59%.
Humana declared that its board has authorized a share repurchase program on Thursday, December 14th that allows the company to buyback $3.00 billion in shares. This buyback authorization allows the insurance provider to purchase shares of its stock through open market purchases. Stock buyback programs are often an indication that the company’s management believes its stock is undervalued.
In other news, SVP Brian P. Leclaire sold 1,679 shares of the stock in a transaction on Thursday, December 21st. The stock was sold at an average price of $245.97, for a total transaction of $412,983.63. Following the completion of the transaction, the senior vice president now directly owns 9,888 shares in the company, valued at approximately $2,432,151.36. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, SVP Jody L. Bilney sold 7,054 shares of the stock in a transaction on Monday, December 18th. The stock was sold at an average price of $247.89, for a total value of $1,748,616.06. Following the transaction, the senior vice president now owns 11,704 shares of the company’s stock, valued at $2,901,304.56. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 10,115 shares of company stock valued at $2,501,627. Company insiders own 0.80% of the company’s stock.
Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Janus Henderson Group PLC grew its holdings in shares of Humana by 74.1% during the 3rd quarter. Janus Henderson Group PLC now owns 2,729,248 shares of the insurance provider’s stock worth $664,921,000 after purchasing an additional 1,161,661 shares during the period. Wells Fargo & Company MN grew its holdings in shares of Humana by 11.4% during the 4th quarter. Wells Fargo & Company MN now owns 1,842,029 shares of the insurance provider’s stock worth $456,951,000 after purchasing an additional 188,711 shares during the period. Geode Capital Management LLC lifted its stake in Humana by 1.9% during the 4th quarter. Geode Capital Management LLC now owns 1,522,654 shares of the insurance provider’s stock worth $376,937,000 after acquiring an additional 28,147 shares in the last quarter. Ameriprise Financial Inc. lifted its stake in Humana by 10.8% during the 3rd quarter. Ameriprise Financial Inc. now owns 1,465,119 shares of the insurance provider’s stock worth $356,960,000 after acquiring an additional 142,706 shares in the last quarter. Finally, Acadian Asset Management LLC lifted its stake in Humana by 3.0% during the 4th quarter. Acadian Asset Management LLC now owns 1,043,303 shares of the insurance provider’s stock worth $258,809,000 after acquiring an additional 30,812 shares in the last quarter. Institutional investors and hedge funds own 94.13% of the company’s stock.
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Humana Company Profile
Humana Inc is a health and well-being company. The Company’s segments include Retail, Group and Specialty, Healthcare Services and Individual Commercial. The Retail segment consists of Medicare benefits, as well as individual commercial fully insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products.
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