Humana Inc (HUM) Posts Strong Guidance and Inline EPS For Fourth Quarter

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Shares of Humana Inc (NYSE:HUM) may be a hot commodity this morning when the market opens after the company has just reported their fourth quarter earnings as well as guidance for 2016.

While the company matched expectations of $1.45 earnings per share for the quarter, and only slightly missed on revenue, reporting $13.4 billion vs. 13.5 billion, it was their guidance for 2016 which should thoroughly impress investors and traders alike.

“Our commitment to our integrated care delivery strategy is strong,” said Bruce D. Broussard, Humana’s President and Chief Executive Officer. “That commitment combined with the operational corrections we made in 2015 provides us a solid trajectory to achieve our target margins for each of our businesses over time, including 4.5 to 5 percent for individual Medicare Advantage. We will continue to balance our business segment margins with the growth in our Healthcare Services businesses to engage our members and drive quality outcomes, resulting in the greatest enterprise value. Further, we are pleased with progress to date on the pending transaction with Aetna and continue to expect it to close in the latter half of 2016.”

Humana Inc (NYSE:HUM) guided towards $8.85 per share for 2016, beating the $8.73 per share that analysts were expecting. The stock increased 1.66% or $2.6 on February 9, hitting $159.56. HUM has declined 14.74% since July 7, 2015 and is downtrending. It has underperformed the S&P500 by 5.87%.

From a total of 4 analysts covering Humana (NYSE:HUM) stock, 1 rate it a “Buy”, 0 a “Sell”, and 3 a “Hold”. This means that 25% of the ratings are positive. The highest target price is $223.0 while the lowest target price is $193. The mean of all analyst targets is $204 which is 27.85% above today’s ($159.56) stock price. Humana was the topic of 5 analyst reports since July 30, 2015 according to the firm StockzIntelligence Inc. Credit Suisse initiated shares on December 16 with a “Neutral” rating. JP Morgan initiated HUM stock in a recent report from September 16 with a “Overweight” rating.

The institutional sentiment decreased to 0.75 in Q2 2015. It’s down 0.16, from 0.91 in 2015Q2. The ratio is negative, as 114 funds sold all their Humana Inc shares they owned while 197 reduced their positions. 54 funds bought stakes while 180 increased their total positions. Institutions now own 146.05 million shares which is 5.68% more than the previous share count of 138.20 million in 2015Q2.

Halcyon Management Partners Lp holds 18.82% of its total portfolio in Humana Inc, equating to 410,228 shares. Jet Capital Investors L P owns 916,383 shares representing 10.46% of their total US portfolio. Moreover, Andromeda Capital Llc has 6.76% of their total portfolio invested in the company, equating to 12,000 shares. The New York-based Glenview Capital Management Llc has a total of 5.89% of their portfolio invested in the stock. Alpine Associates Management Inc., a New Jersey-based fund reported 766,700 shares owned.

Humana Inc. is a health and well-being company. The company has a market cap of $22.53 billion. The Firm operates in three divisions: Retail, Employer Group and Healthcare Services. It has 18.33 P/E ratio. The Company’s medical and specialty insurance products allow members to access health care services through its network of health care providers.

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