KeyBanc analyst Matthew Gillmor initiated coverage of Humana with a Sector Weight rating. The firm said that Humana is under-earning across its Medicare Advantage book due to v28 changes, rising utilization during 2023-2024, and lower benchmark updates. Efforts to improve margins through plan exits should provide some benefit next year, though total beneficiary cost thresholds and weaker 2025 Stars likely push a meaningful margin recovery into 2027 and beyond, the analyst tells investors in a research note. The firm added that its estimates for 2024 largely align with the consensus, but are slightly below for 2025.
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