Humana (HUM) Ups '23 Medicare Advantage Membership Growth View

Humana Inc. HUM recently raised its membership growth outlook for 2023. A better-than-expected sales witnessed so far in the current enrollment period and modestly favorable retention are expected to support the growth.

The company hiked its 2023 individual Medicare Advantage membership growth guidance to a minimum of 500,000 members, up from the earlier increased estimated range of 325,000-400,000 members. Previously, HUM provided individual Medicare Advantage membership growth guidance of 150,000-200,000 members during 2022.

It expects 2023 net membership gains to be a minimum of 10.9% from the 2022 projection. HUM expects the industry growth rate to be in the high single digits. However, the membership growth is not expected to impact its 2023 adjusted EPS, which is estimated to grow 11-15% from the 2022 adjusted EPS guidance of $25.

The adjusted EPS guidance of 2022 includes transaction and integration costs of 62 cents per share and amortization of identifiable intangibles of 48 cents per share. The Zacks Consensus Estimate for 2022 and 2023 adjusted EPS are pegged at $25.05 and $27.97, respectively. Further, the consensus marks for 2022 and 2023 top lines indicate 11.7% and 9.3% year-over-year growth, respectively.

Humana managed to beat earnings estimates in each of the past four quarters, with an average of 10.4%.

Price Performance

Humana’s shares have improved 30.1% in the past year compared with the 23.9% rise of the industry it belongs to.

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Zacks Rank & Key Picks

Humana currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Elevance Health Inc. ELV, AMN Healthcare Services, Inc. AMN and Inventiva S.A. IVA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Elevance Health’s full-year earnings is currently pegged at $29.02 per share, indicating a year-over-year increase of 11.7%. ELV beat earnings estimates in all the past four quarters, with an average surprise of 4.1%.

The Zacks Consensus Estimate for AMN Healthcare’s current year bottom line indicates a 44% improvement from the prior-year reported number. The consensus estimate for AMN’s top line also indicates 30.1% year-over-year growth.

The Zacks Consensus Estimate for Inventiva’s 2022 bottom line indicates an 11.3% year-over-year improvement. IVA has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.

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