Humana (NYSE:HUM) Shares Gap Down - Time to Sell?

Key Points

• Q1 beat and revenue growth: Humana reported EPS of $10.31 (vs. $10.00 est.) and revenue rose about 23.5%, helped by lower-than-expected medical costs that eased near-term margin pressure.
• Shares fell despite the beat: the stock gapped down (opened $217.19 vs prior close $229.72) after the company trimmed FY‑26 reported EPS and warned lower Medicare Advantage Star Ratings will reduce bonus payouts, prompting investor concern even as adjusted guidance was affirmed.
• Strategic partnership and mixed analyst outlook: Humana’s CenterWell expanded a deal with Mark Cuban’s Cost Plus Drugs to target employer pharmacy costs, while analysts’ price targets vary widely and the consensus rating is "Hold" with a $222.09 target.

Humana Inc. (NYSE:HUM - Get Free Report) shares gapped down before the market opened on Wednesday . The stock had previously closed at $229.72, but opened at $217.19. Humana shares last traded at $223.31, with a volume of 555,450 shares.

Humana News Roundup

Here are the key news stories impacting Humana this week:

• Positive Sentiment: Q1 beat and revenue growth — Humana reported EPS of $10.31 (above estimates) and revenue rose ~23.5%; lower-than-expected medical costs helped drive the beat, signaling near-term margin relief. Humana beats quarterly profit estimates on lower medical costs
• Positive Sentiment: Strategic pharmacy partnership — Humana’s CenterWell expanded its partnership with Mark Cuban’s Cost Plus Drugs to tackle employer drug costs, which could lower pharmacy spend for employer clients and support margins over time. Mark Cuban’s Cost Plus Drugs, Humana In Deal To Take On Employer Drug Costs
• Neutral Sentiment: Affirmed adjusted guidance — Humana affirmed its full‑year adjusted earnings and revenue guidance even as it adjusted reported EPS assumptions, which keeps analyst models broadly intact but leaves room for interpretation. Humana Reports First Quarter 2026 Financial Results; Affirms Full Year 2026 Adjusted Financial Guidance
• Neutral Sentiment: Swedish unit legal timeline set — A Stockholm court set a June verdict date in a permit dispute involving Humana’s Swedish care subsidiary; the outcome is localized but worth monitoring for reputational/regulatory impact in Europe. Stockholm Court Sets June Verdict Date in Humana Permit Dispute
• Negative Sentiment: Guidance and Medicare Star Ratings dent sentiment — Despite the beat, Humana trimmed its FY26 reported‑EPS view (while maintaining adjusted guidance) and flagged profit pressure from lower Medicare Advantage Star Ratings (which reduced bonus payouts). That combination triggered a selloff after the print as investors worried about near‑term profit durability. Humana (HUM) Stock Tumbles Despite Q1 Earnings Beat Amid Unchanged Guidance Humana Profit Falls as Lower Medicare Ratings Hurt Bonuses

Wall Street Analyst Weigh In

HUM has been the subject of several analyst reports. Morgan Stanley set a $146.00 target price on Humana in a research note on Thursday, February 12th. Sanford C. Bernstein reaffirmed an "outperform" rating and set a $344.00 price objective on shares of Humana in a research report on Tuesday, January 6th. Wolfe Research lowered their price objective on Humana from $325.00 to $250.00 and set an "outperform" rating for the company in a research report on Monday, April 6th. TD Cowen lowered their price objective on Humana from $260.00 to $173.00 and set a "hold" rating for the company in a research report on Friday, February 13th. Finally, Raymond James Financial lowered their price objective on Humana from $340.00 to $230.00 and set an "outperform" rating for the company in a research report on Friday, February 13th. Seven research analysts have rated the stock with a Buy rating, fifteen have issued a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat.com, Humana presently has an average rating of "Hold" and a consensus price target of $222.09.

Humana Trading Up 2.9%

The stock has a market capitalization of $28.37 billion, a price-to-earnings ratio of 24.08, a PEG ratio of 2.40 and a beta of 0.44. The company has a debt-to-equity ratio of 0.70, a quick ratio of 2.00 and a current ratio of 2.00. The business has a 50-day moving average of $186.35 and a 200-day moving average of $227.34.

Humana (NYSE:HUM - Get Free Report) last announced its earnings results on Wednesday, April 29th. The insurance provider reported $10.31 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $10.00 by $0.31. Humana had a return on equity of 11.43% and a net margin of 0.92%.The company's revenue was up 23.5% compared to the same quarter last year. During the same period in the previous year, the firm posted $11.58 earnings per share. Humana has set its FY 2026 guidance at 9.000- EPS. As a group, research analysts forecast that Humana Inc. will post 9.05 EPS for the current year.

Humana Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, July 31st. Shareholders of record on Friday, June 26th will be given a dividend of $0.885 per share. This represents a $3.54 dividend on an annualized basis and a yield of 1.5%. The ex-dividend date of this dividend is Friday, June 26th. Humana's dividend payout ratio (DPR) is presently 36.05%.

Insiders Place Their Bets

In related news, insider Sanjay K. Shetty acquired 810 shares of the firm's stock in a transaction on Monday, February 23rd. The stock was bought at an average cost of $185.21 per share, with a total value of $150,020.10. Following the transaction, the insider owned 11,657 shares of the company's stock, valued at $2,158,992.97. The trade was a 7.47% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is accessible through the SEC website. Insiders own 0.20% of the company's stock.

Institutional Trading of Humana

A number of hedge funds have recently added to or reduced their stakes in HUM. Capital International Investors lifted its position in Humana by 113.9% during the 4th quarter. Capital International Investors now owns 5,818,008 shares of the insurance provider's stock worth $1,490,239,000 after acquiring an additional 3,097,571 shares during the period. Massachusetts Financial Services Co. MA lifted its position in Humana by 273.2% during the 3rd quarter. Massachusetts Financial Services Co. MA now owns 3,488,261 shares of the insurance provider's stock worth $907,541,000 after acquiring an additional 2,553,509 shares during the period. Norges Bank acquired a new stake in Humana during the 4th quarter worth approximately $456,632,000. Pzena Investment Management LLC lifted its position in Humana by 34.3% during the 1st quarter. Pzena Investment Management LLC now owns 5,470,982 shares of the insurance provider's stock worth $948,614,000 after acquiring an additional 1,398,774 shares during the period. Finally, Wellington Management Group LLP lifted its position in Humana by 4,481.7% during the 4th quarter. Wellington Management Group LLP now owns 1,196,502 shares of the insurance provider's stock worth $306,460,000 after acquiring an additional 1,170,387 shares during the period. 92.38% of the stock is owned by institutional investors and hedge funds.

About Humana

Humana Inc NYSE: HUM is a health insurance company headquartered in Louisville, Kentucky, that primarily serves individuals and groups across the United States. The company is best known for its Medicare business, offering Medicare Advantage plans and prescription drug (Part D) coverage, alongside a range of commercial and employer-sponsored group health plans. Humana's products are designed to cover medical, behavioral health and pharmacy needs for members, with particular emphasis on seniors and Medicare-eligible populations.

In addition to traditional insurance products, Humana provides care-management and wellness services intended to support chronic-condition management, preventive care and care coordination.

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