Humana Stock Jumps. Why it Could be a Big Winner in Next Medicare Star Ratings.

Dow Jones
09/26

It's that time of year when Medicare Advantage insurers await a big announcement from the government: their eligibility for financial bonuses, known as star ratings.

Barclays estimates Humana is on track for a bump-and has upgraded the stock to Overweight from Neutral.

Barclays also lifted its price target for Humana shares to $515 from $407.

On Friday morning, Humana stock was up more than 8% to $411.93, outpacing the broader market, up 0.12%.

Medicare's bonus payments to insurers are meant to reward higher quality plans, drawing on dozens of measures that are translated to a 5-star rating system. Collectively the bonus payments are worth billions of dollars. This year the Medicare agency is expected to spend $13.4 billion on the bonus program, up from $12.7 billion in 2025, according to health policy research group KFF.

The stakes are high for Humana, after missing out on eligibility for certain bonus payments in 2026. Executives set their sights on recovering for bonus year 2028, based on the upcoming release of 2027 star ratings.

That ratings announcement is anticipated to come out around Oct. 8. Analysts see it as the next stock catalyst for insurers in the Medicare Advantage market.

Barclays is "increasingly constructive" on the view that Humana will be able to "flip several contracts to bonus status"-including a larger contract, H5216, which covers 2.4 million lives, or about one-third of Humana's total.

"This contract is the most critical component of the company's long-term 2028" earnings target, worth about $1.5 billion of EBIT, or earnings before interest and taxes, and $9 of earnings per share, wrote analyst Andrew Mok in a Friday client note.

Based on publicly available information at this stage, and Barclays own proprietary scoring framework, Mok sees a 75% probability that the H5216 is upgraded.

The insurer is entering the bonus year 2028 ratings cycle "in a much stronger position than it did a year ago," Mok wrote.

 

应版权方要求,你需要登录查看该内容

免责声明:投资有风险,本文并非投资建议,以上内容不应被视为任何金融产品的购买或出售要约、建议或邀请,作者或其他用户的任何相关讨论、评论或帖子也不应被视为此类内容。本文仅供一般参考,不考虑您的个人投资目标、财务状况或需求。TTM对信息的准确性和完整性不承担任何责任或保证,投资者应自行研究并在投资前寻求专业建议。

热议股票

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10