BofA downgraded Humana to Neutral from Buy with a price target of $342, down from $470. BofA sees the deteriorating rate environment becoming a risk to forward estimates. The new trajectory should support 20%+ EPS growth for a number of years as the industry reprices, albeit with lower membership growth, the analyst tells investors in a research note. Humana had talked about the rate proposal as being 160 basis points lower than their original expectations which equates to roughly $10 of EPS in aggregate, and now sees $19 as a reasonable starting point for 2025.
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