Humana, Inc. (HUM)

We are upgrading our recommendation on Humana, Inc. (HUM - Analyst Report) to Outperform based on its robust top-line growth, sturdy cash position and favorable acquisitions along with the increased membership guidance. Humana's third-quarter earnings surpassed the Zacks Consensus Estimate and increased guidance for 2011.

On January 10, 2012, Humana announced an agreement with St. Vincent's HealthCare, whereby the members of Humana's Medicare Advantage plans will be able to use St. Vincent's programs, facilities and doctors, including cardiologists and other specialists.

Overall, we believe that the efficient growth strategy through acquisitions, stable ratings and a strong investment portfolio will likely attract long-term investors. Our six-month target price of $113.00 equates to 13.4x our earnings estimate for 2011. Combined with the $1.00 per share annual dividend, this target price implies an expected total return of 20.3% over that period.

Humana, Inc. (HUM) : FULL ANALYST REPORT

Read the full analyst report on HUM