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Humana (HUM) Soars 3.1%: Is Further Upside Left in the Stock?

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Humana (HUM - Free Report) shares rallied 3.1% in the last trading session to close at $293.80. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 11.5% gain over the past four weeks.

This marks the fourth consecutive day of Humana’s price increases. Increased optimism related to an uptick in Medicare Advantage plan payments for 2026, which would amount to over $21 billion in additional funds for insurers and favorable earnings forecasts are aiding the stock.

Additionally, Barclays raised its price target for Humana to $255 from $253, on Jan. 22, 2025, maintaining an Equal Weight rating despite concerns about broader market volatility. The price target increase, coupled with the positive CMS news, reinforced investor sentiment regarding Humana’s prospects.

 

This health insurer is expected to post quarterly loss of $2.26 per share in its upcoming report, which represents a year-over-year change of -1954.6%. Revenues are expected to be $28.82 billion, up 12% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Humana, the consensus EPS estimate for the quarter has been revised 0.7% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on HUM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Humana is part of the Zacks Medical - HMOs industry. Cigna (CI - Free Report) , another stock in the same industry, closed the last trading session 2.1% higher at $294.99. CI has returned 3.2% in the past month.

For Cigna, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $7.83. This represents a change of +15.3% from what the company reported a year ago. Cigna currently has a Zacks Rank of #3 (Hold).


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