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Can Humana (HUM) Pull a Surprise This Earnings Season?
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Humana Inc. (HUM - Free Report) will release fourth-quarter 2016 results on Feb 8, before the market opens. Last quarter, the company posted a positive earnings surprise of 3.92%. Let’s see how things are shaping up for this announcement.
Factors to Be Considered This Quarter
We expect Humana’s Individual Medicare Advantage, the Group Medicare Advantage and Healthcare Services businesses to continue delivering impressive performance in the fourth quarter.
Management expects PDP (Prescription Drug Plans) membership to expand further. The stand-alone PDP contract growth, in turn, should result in the Medicare business reporting improved results.
However, Individual commercial membership is likely to remain a drag due to the rise in premiums along with benefit redesigns in place since the beginning of 2016. Humana’s plan to reduce Affordable Care Act (ACA)-compliant Individual Commercial presence might also have affected membership growth for this segment.
Humana’s public exchange business, which has been underperforming since last few quarters is also expected to have been affected adversely by the reduced sale of ACA plans on the public exchanges.
Humana is likely to have witnessed an increase in operating expenses in the fourth quarter. This is due to higher benefit expenses that are expected to have put pressure on margins.
Our proven model does not conclusively show whether Humana is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Humana has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.06. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Humana carries a Zacks Rank #3 (Hold). Though the company has a favorable Zacks Rank, its 0.00% Earnings ESP complicates surprise prediction.
Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the Medical sector that you may want to consider as they have the right combination of elements to post an earnings beat this quarter:
Acorda Therapeutics, Inc. has an Earnings ESP of +5.56% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings results on Feb 14.
Davita Healthcare Partners, Inc. (DVA - Free Report) has an Earnings ESP of +4.40% and a Zacks Rank #3. The company is slated to report fourth-quarter earnings results on Feb 9.
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Can Humana (HUM) Pull a Surprise This Earnings Season?
Humana Inc. (HUM - Free Report) will release fourth-quarter 2016 results on Feb 8, before the market opens. Last quarter, the company posted a positive earnings surprise of 3.92%. Let’s see how things are shaping up for this announcement.
Factors to Be Considered This Quarter
We expect Humana’s Individual Medicare Advantage, the Group Medicare Advantage and Healthcare Services businesses to continue delivering impressive performance in the fourth quarter.
Management expects PDP (Prescription Drug Plans) membership to expand further. The stand-alone PDP contract growth, in turn, should result in the Medicare business reporting improved results.
However, Individual commercial membership is likely to remain a drag due to the rise in premiums along with benefit redesigns in place since the beginning of 2016. Humana’s plan to reduce Affordable Care Act (ACA)-compliant Individual Commercial presence might also have affected membership growth for this segment.
Humana’s public exchange business, which has been underperforming since last few quarters is also expected to have been affected adversely by the reduced sale of ACA plans on the public exchanges.
Humana is likely to have witnessed an increase in operating expenses in the fourth quarter. This is due to higher benefit expenses that are expected to have put pressure on margins.
Humana Inc. Price and EPS Surprise
Humana Inc. Price and EPS Surprise | Humana Inc. Quote
Earnings Whispers
Our proven model does not conclusively show whether Humana is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Humana has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.06. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Humana carries a Zacks Rank #3 (Hold). Though the company has a favorable Zacks Rank, its 0.00% Earnings ESP complicates surprise prediction.
Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the Medical sector that you may want to consider as they have the right combination of elements to post an earnings beat this quarter:
Molina Healthcare Inc. (MOH - Free Report) , which is expected to report fourth-quarter earnings results on Feb 15, has an Earnings ESP of +5.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Acorda Therapeutics, Inc. has an Earnings ESP of +5.56% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings results on Feb 14.
Davita Healthcare Partners, Inc. (DVA - Free Report) has an Earnings ESP of +4.40% and a Zacks Rank #3. The company is slated to report fourth-quarter earnings results on Feb 9.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>