Humana Inc. (NYSE: HUM) shares jumped 2.74% on February 2 and gained another 6.4% during the extended trading session, after the company delivered mixed results; however, HUM issued FY2022 guidance well above the analyst expectations.
Furthermore, investors welcomed the company’s announcement of a $1 billion investment in its Medicare Advantage business.
Q4 Numbers
Notably, adjusted earnings of $1.24 per share beat analysts’ expectations of $1.15 per share. The quarterly earnings per share (EPS) marked a significant improvement compared to the adjusted loss of $2.30 per share reported for the prior-year period.
Meanwhile, revenues jumped 10.4% year-over-year to $21.05 billion but modestly fell short of consensus estimates of $21.23 billion.
Value Creation Initiatives Worth $1B
With an aim to fund growth in its Medicare Advantage business and bolster its Healthcare Services capabilities in 2023, Humana committed to drive $1 billion of incremental value through cost savings, productivity initiatives, and acceleration from previous investments.
FY2022 Outlook
Based on robust Q4 results, the company issued financial guidance for FY2022.
The company forecast adjusted earnings of at least $24.00 per share, while the consensus estimate is pegged at $23.85 per share.
Management Weighs In
Humana CEO, Bruce D. Broussard, commented, “Looking ahead, we are confident in both the fundamentals of the Medicare Advantage industry, and the long-term growth prospects for our company.”
He further added, “We expect that improved membership growth, further penetration in our growing and maturing Healthcare Services businesses, and our increased focus on productivity improvements will position us to deliver on our long-term earnings target in 2023 and beyond.”
Analysts Recommendation
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 9 Buys and 8 Holds. The average Humana price target of $478.35 implies 19.22% upside potential to current levels.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 100% Bullish on HUM stock, compared to a sector average of 70%.
Download the TipRanks mobile app now
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Read full Disclaimer & Disclosure
Related News:
General Motors Posts Mixed Q4 Results
PulteGroup Delivers Upbeat Q4 Results
Stanley Black & Decker Beats Q4 Earnings But Misses Revenues Estimates
