Morgan Stanley analyst Erin Wright maintained a Hold rating on Humana yesterday and set a price target of $277.00.
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Erin Wright’s rating is based on several strategic measures that Humana is implementing to enhance its future performance. Although the recent inadvertent release of Stars data suggested that only about 20% of current Medicare Advantage members are enrolled in plans with 4 or more stars, Humana has outlined a strategy to improve this figure significantly by the 2026 and 2027 enrollment periods. The company is confident in its ability to achieve these improvements through a contract diversification strategy and by focusing on plans with higher star ratings.
Additionally, Humana has taken steps to improve membership growth and retention by stabilizing benefits and adjusting its customer service approach. The company is also optimizing its sales strategy by discontinuing commissions on certain products and terminating relationships with underperforming distribution partners. These actions, along with the expectation of doubling pre-tax margins for individual Medicare Advantage plans by 2026, contribute to the Hold rating as Humana navigates through these transitional strategies.
In another report released today, Barclays also maintained a Hold rating on the stock with a $245.00 price target.