Humana stock rallies after UBS turns bullish ahead of earnings
Shares of Humana Inc. climbed 2.1% in afternoon trading Wednesday, after the health insurance services company was upgraded at UBS about two week ahead of its earnings release, citing the belief the company can return to "above industry growth levels" for its Medicare Advantage (MA) business. The stock had plummeted in early January, including the biggest one-day selloff in over a decade on Jan. 6, after the company said it suffered higher-than-expected terminations during the MA annual election period (AEP). UBS analyst Kevin Caliendo raised his rating to buy after being at neutral the past three years, and lifted his stock price target to $520 from $486. "Our channel checks pointed to increased compliance requirement being the root cause of the membership decline during AEP," Caliendo wrote in a note to clients. "However, these issues appear to be easily addressable and we believe management understands and is addressing these issues for the 2023 AEP." Humana is scheduled to report first-quarter results ahead of the April 27 open. The stock has slipped 1.1% year to date, while the SPDR Health Care Select Sector ETF has declined 1.2% and the S&P 500 has dropped 6.9%.
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