Bear of the Day: Humana (HUM)

Humana
HUM is a health
care plan provider in the United States. The company provides
health insurance benefits under Health Maintenance Organization,
Private Fee-For-Service, and Preferred Provider Organization
plans.

Analysts have taken a bearish stance on the company's earnings
outlook, landing it into a Zacks Rank #5 (Strong Sell).

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Source: Zacks Investment Research

In addition, the company currently resides in the Zacks Medical
- HMOs industry, which is currently ranked in the bottom 14% of all
Zacks industries. Let's take a closer look at a few other aspects
of the company.

Humana

HUM shares have struggled to find their footing over the last
year, losing nearly -29% in value and widely underperforming
relative to the S&P 500. Shares faced notably strong selling
pressure following its latest quarterly release, with the company
falling short of the Zacks Consensus EPS estimate by 57%.

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Source: Zacks Investment Research

The results were hampered by an additional increase in Medicare
Advantage medical cost trends, causing the company to give 'soft'
initial guidance for its FY24. The results snapped a streak of
positive EPS surprises, with investors reacting negatively in
response.

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Source: Zacks Investment Research

The company's profitability is forecasted to take a sizable hit
in its current year (FY24), with the $16.05 Zacks Consensus EPS
estimate representing a pullback of -38% from FY23. Shares
presently trade at a 20.3X forward 12-month earnings multiple,
above the five-year median and the respective Zacks industry
average.

The stock carries a Style Score of 'D' for Value.

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Source: Zacks Investment Research

Bottom Line

Negative earnings estimate revisions from analysts stemming from
increased costs paint a challenging picture for the company's
shares in the near term.

Humana
HUM is a Zacks
Rank #5 (Strong Sell), indicating that analysts have taken a
bearish stance on the company's earnings outlook.

For those seeking strong stocks, a great idea would be to focus
on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2
(Buy) - these stocks sport a notably stronger earnings outlook
paired with the potential to deliver explosive gains in the near
term.

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