Humana (NYSE:HUM) Stock Jumps 6.8% - Here's Why

Key Points

• Humana shares rose 6.8% to approximately $406.19, reaching above the analyst consensus price target of $408.61. The move followed mixed analyst updates, including Leerink Partners upgrading the stock to “outperform” with a $513 target.
• Humana’s latest quarterly results exceeded expectations, with EPS of $7.61 versus $7.27 expected and revenue of $40.89 billion, up 26.2% year over year.
• The company declared a quarterly dividend of $0.885 per share, equivalent to a $3.54 annualized payout and a 0.9% yield; institutional investors own 92.38% of the stock.

Shares of Humana Inc. (NYSE:HUM - Get Free Report) shot up 6.8% during trading on Friday. The stock traded as high as $397.49 and last traded at $406.19. Approximately 327,924 shares traded hands during trading, a decline of 80% from the average daily volume of 1,643,059 shares. The stock had previously closed at $380.32.

Analyst Ratings Changes

Several research firms have issued reports on HUM. Robert W. Baird set a $390.00 price target on shares of Humana in a research report on Thursday, July 30th. Leerink Partners raised Humana from a "market perform" rating to an "outperform" rating and set a $513.00 price objective for the company in a research note on Thursday, July 30th. Deutsche Bank Aktiengesellschaft began coverage on Humana in a report on Thursday, July 30th. They issued a "hold" rating on the stock. Cantor Fitzgerald reaffirmed a "neutral" rating on shares of Humana in a research report on Friday, September 4th. Finally, Lake Street Capital initiated coverage on Humana in a research report on Thursday, July 30th. They issued a "buy" rating for the company. Fifteen equities research analysts have rated the stock with a Buy rating, fourteen have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, Humana has a consensus rating of "Hold" and an average price target of $408.61.

Humana Trading Up 5.9%

The company's 50-day moving average is $386.59 and its 200 day moving average is $317.25. The company has a current ratio of 1.74, a quick ratio of 1.74 and a debt-to-equity ratio of 0.62. The firm has a market cap of $48.36 billion, a PE ratio of 38.14, a P/E/G ratio of 2.30 and a beta of 0.74.

Humana (NYSE:HUM - Get Free Report) last posted its quarterly earnings data on Wednesday, July 29th. The insurance provider reported $7.61 earnings per share for the quarter, topping the consensus estimate of $7.27 by $0.34. Humana had a net margin of 0.88% and a return on equity of 11.20%. The firm had revenue of $40.89 billion for the quarter, compared to analysts' expectations of $40.58 billion. During the same period in the previous year, the company posted $6.27 EPS. The company's quarterly revenue was up 26.2% compared to the same quarter last year. As a group, sell-side analysts predict that Humana Inc. will post 9 EPS for the current year.

Humana Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, November 27th. Investors of record on Friday, October 30th will be given a dividend of $0.8850 per share. This represents a $3.54 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend is Friday, October 30th. Humana's payout ratio is presently 33.49%.

Institutional Investors Weigh In On Humana

A number of institutional investors have recently bought and sold shares of HUM. BlackRock Inc. acquired a new position in shares of Humana in the 2nd quarter valued at about $4,138,160,000. Capital International Investors grew its position in Humana by 113.9% during the fourth quarter. Capital International Investors now owns 5,818,008 shares of the insurance provider's stock valued at $1,490,239,000 after purchasing an additional 3,097,571 shares in the last quarter. Pzena Investment Management LLC grew its position in Humana by 34.3% during the first quarter. Pzena Investment Management LLC now owns 5,470,982 shares of the insurance provider's stock valued at $948,614,000 after purchasing an additional 1,398,774 shares in the last quarter. Geode Capital Management LLC increased its stake in Humana by 0.8% in the 4th quarter. Geode Capital Management LLC now owns 3,184,569 shares of the insurance provider's stock valued at $812,540,000 after buying an additional 23,732 shares during the period. Finally, Bank of New York Mellon Corp increased its stake in Humana by 21.9% in the 4th quarter. Bank of New York Mellon Corp now owns 2,094,570 shares of the insurance provider's stock valued at $536,482,000 after buying an additional 376,803 shares during the period. 92.38% of the stock is currently owned by institutional investors and hedge funds.

About Humana

Humana Inc NYSE: HUM is a U.S.-based health insurance and health care services company focused primarily on government-sponsored programs. Its offerings include Medicare Advantage plans, Medicare prescription drug plans, Medicaid coverage and specialty insurance products, serving individuals, employers and government organizations.

Through its CenterWell business, Humana also provides senior-focused primary care, pharmacy services and home health care. These operations are designed to support coordinated care for older adults and other members with ongoing health care needs.

Humana was founded in 1961 as a nursing-home company and later expanded into hospital ownership before shifting its focus toward health insurance.

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