Argus cuts Humana to Hold on larger Medicare exposure amid higer utilization

As previously reported, Argus analyst David Toung downgraded Humana to Hold from Buy. The company faces headwinds to revenue and earnings growth as its profit margin is squeezed by an unanticipated spike in medical utilization among its Medicare Advantage members, and this elevated utilization observed in Q4 is likely to continue in 2024, the analyst tells investors in a research note. Argus is cutting its FY24 EPS view on Humana by 18c to $16.20 while noting that with more than 70% of revenue generated by the Medicare Advantage business, the company has a larger exposure to the Medicare Advantage market than other companies in its coverage universe of managed-care sector.