NEW YORK (TheStreet) -- Shares of Humana Inc (HUM) are lower by 0.5% to $172.67 in pre-market trading Wednesday, after analysts at Sterne Agee lowered its rating on the company to "underperform" from "neutral" this morning.
The firm also slashed its price target to $150 from $165 on shares of the hospital operator, citing a lower chance of the company being acquired. Sterne Agee said speculation about a takeover is "wishful thinking" at current share levels.
Analysts also see potential earnings downside in the coming quarters, saying there is "material" risk to Humana's earnings guidance risk with paid claims outpacing premium growth.
Louisville, Ky.-based Humana is engaged in providing health insurance and medicare plans to individuals, families, seniors, servicemen and servicewomen, and veterans.
It operates in three segments including retail, employer group, and healthcare services.
Separately, TheStreet Ratings team rates HUMANA INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HUMANA INC (HUM) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow."