The firm upgraded shares based on improved reimbursement rate visibility, continued growth in the Medicare population, and a history of proven results and an attractive story.
They set a price target of $155 for the health care company.
Separately, TheStreet Ratings team rates HUMANA INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate HUMANA INC (HUM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, HUM's share price has jumped by 53.36%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HUM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.8%. Since the same quarter one year prior, revenues rose by 11.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- HUM's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.47, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 62.86% to $671.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 37.05%.
- You can view the full analysis from the report here: HUM Ratings Report