Humana rose about 1 percent today, a quiet session that keeps the stock near the three-year highs it reached last month. We think this is mostly a continuation of the positive shift after July's earnings, where the company proved it is still growing its membership fast despite higher costs.
Our view
The company is successfully signing up a record number of new members even while it navigates a temporary dip in government bonus payments. If you already own it, there is nothing to do here but sit tight and wait for those new members to become profitable in the coming years.
Humana partners with HealthStream to train Indiana home care workers
Humana's Medicaid arm in Indiana is collaborating with HealthStream to provide training and support for home care workers. This effort aims to increase the number of qualified staff available to care for members in their own homes. Expanding the local workforce helps the company manage its Medicaid business more effectively. By strengthening the network of caregivers, Humana can better control the quality and availability of care for its members in the state.
Humana's subsidiary, iCare, won contracts to provide care coordination and health services for the Family Care and Family Care Partnership programs in Wisconsin. These programs help seniors and adults with disabilities live independently rather than in nursing homes. While this is a regional win, it shows the company is successfully competing for state-managed health contracts even as it focuses on its larger national Medicare business.
Morgan Stanley set its price target for the stock at $370. This is lower than the average analyst target of $417, suggesting the firm is more cautious about how quickly profits will recover. The move follows the company's latest earnings report where it kept its profit outlook steady despite ongoing pressure from lower government quality bonuses.
Barclays increased its price target for the stock to $407, a rise of about 18 percent. The firm kept its rating at Equal Weight, which is essentially a neutral stance. This change reflects more confidence in the company's ability to manage its medical costs, which stayed in line with expectations last quarter even as the industry faces rising care expenses for seniors.
Guggenheim significantly raised its price target for the stock to $471, up from $269. The firm kept its Buy rating, signaling high confidence that the company can navigate its current challenges. This optimistic view likely rests on the company's massive membership growth this year, which should lead to much higher earnings once profit margins on those new members return to normal levels in 2027.
Analysts issued a flurry of rating changes and price target hikes in late July following a busy month of company updates. Most analysts remain neutral with 17 buys out of 44 ratings, and the average target suggests 8% upside.
Average target$416.78+8%vs $387.31 today
Avg price
Low $300High $513
Hold44 analysts
1Bearish
26Neutral
17Bullish
FirmRatingPrice TargetDate
Morgan Stanley
Equal Weight
$370
8/4/2026
Barclays
Equal Weight
$344→$407
7/31/2026
Piper Sandler
Neutral
$463
7/30/2026
UBS
Neutral
$320→$405
7/30/2026
Oppenheimer
—
$340→$405
7/30/2026
Robert W. Baird
—
$205→$390
7/30/2026
Guggenheim
Buy
$269→$471
7/30/2026
Leerink Partners
—
$255→$513
7/30/2026
Evercore ISI
Outperform
$480
7/29/2026
Jefferies
Buy
$410
7/20/2026
Truist Financial
Hold
$320→$415
7/14/2026
Wells Fargo
Overweight
$502
7/13/2026
Humana earnings
Management has a perfect two-year streak of beating expectations, often by a wide margin, which suggests they are conservative with their forecasts and the business is performing better than they let on.
Earnings history
EstimateBeatMiss
Humana past earnings results
Expected
Actual
Surprise
EPS
$7.27
$7.61
+4.7%
Revenue
$40.58B
$40.87B
+0.7%
Key highlights
Membership growth holds steady: The company expects individual Medicare Advantage membership to grow by approximately 25% for the full year 2026. This reflects a steady pace as the company uses a new customer service approach to help keep existing members while adding new ones.
Medical costs under control: The insurance segment reported a benefit ratio, which is the percentage of premiums spent on medical claims, of 91.2% for the quarter. This is an improvement compared to the full year 2026 forecast of 92.75% and shows management is keeping medical spending in line with its earlier promises.
Care delivery expanding fast: The CenterWell senior primary care business grew its patient count by 27% so far this year to 130,900 patients. Growth in this division is important because it allows the company to earn money by providing the actual medical care, not just paying the insurance claims.
Profit outlook maintained: Management affirmed it expects to earn at least $9.00 in adjusted profit per share for the full year 2026. This target remains unchanged even though the company faces a financial headwind from lower quality bonus payments after plan ratings declined.
Our take: This was a stable and reassuring quarter that showed the company is successfully managing the medical costs it can control. While lower plan quality ratings will weigh on profits next year, hitting the $9.00 full year target would prove the business is resilient during a difficult transition. It keeps the long term case for the stock on track.
