Humana, the top-rated managed care stock, topped earnings estimates early Wednesday with revenue in line. Guidance for 2023 set the floor for EPS just above analyst views. HUM stock edged higher Wednesday, briefly flashing an early entry.
Humana CEO Bruce Broussard said in the earnings statement that Humana is on track for Medicare Advantage membership growth of at least 625,000, or 13.7%, this year.
"This robust membership outlook reflects high quality growth, with our improvement in retention more than doubling expectations." He added that Humana is continuing its track-record of growing membership faster than the industry.
Humana Earnings
Results: Humana earnings rose 31% vs. a year earlier to $1.62 a share adjusted, and 16 cents ahead of estimates. Revenue rose 6.6% to $22.44 billion, roughly in line with estimates for $22.48 billion.
Benefits as a share of premiums fell to 87.5% from 88.5% a year ago.
Humana completed its alignment into two segments. The insurance segment, which includes its pharmacy benefit management business, reported adjusted income of $53 million in Q4. The CenterWell includes Humana's health provider, home care and pharmacy dispensing services. CenterWell earned $325 million.
Outlook: Humana said it expects adjusted EPS of at least $28 in 2023, which represents 10.9% growth at a minimum. Analysts were forecasting $27.99, according to FactSet. The company said it's confident it can meet a commitment to hit $37 in adjusted EPS in 2025.
HUM Stock
HUM stock rose 0.3% to 513.28 in Wednesday action, peeking above the 50-day line. On Tuesday, Humana stock rallied 5.5%, rebounding back above its 200-day line.
Shares are working on a 571.40 buy point from a new consolidation.
Intraday Wednesday, HUM stock hit 527.77, just breaking a trendline entry.
The Medical-Managed Care group is ranked a lowly 170 of 197 industry groups based on price performance and momentum. Before HUM stock's rally on Tuesday, its relative strength line, the blue line in IBD charts that tracks its progress vs. the S&P 500 had fallen to a four-month low.
In this market rally, there's not yet much indication that managed-care stocks can be leaders.
