In Monday's early morning trading session, shares of Humana are dropping 0.48% to $213.62.
Analysts cited that the company is working with Goldman Sachs regarding a potential sale, according to a Dow Jones report on Friday. Potential bidders include Aetna (AET) and Cigna (CI), analysts noted.
"We are raising out price target to reflect the group's revaluation and HUM's position as the insurer most focused on Medicare Advantage," analysts added.
Regarding the Medicare Advantage members, Humana had 3.2 million members at 3/31/15, compared with 1.4 million for Anthem (ANTM) and 1.2 million for Aetna, the analyst note detailed.
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 few notable 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HUM's revenue growth has slightly outpaced the industry average of 13.2%. Since the same quarter one year prior, revenues rose by 18.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.22, which illustrates the ability to avoid short-term cash problems.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 43.50% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 16.8% when compared to the same quarter one year prior, going from $368.00 million to $430.00 million.
- You can view the full analysis from the report here: HUM Ratings Report