Humana Inc.

Humana had a mixed quarter as its revenues were below the analyst consensus estimate but it did manage an earnings beat. The company has fully deployed the value-based model in Virginia and North Carolina, covering over 760,000 members or 15% of Humana MA members by year’s end. Pharmacy results also remained strong. Medicaid business maintained its strong performance despite lower-than-expected medical costs. Commercial group medical and specialty businesses also continued to experience favorable utilization throughout the year. Besides, the company’s Primary Care segment improved the operating performance of its wholly owned centers. They also enhanced their value-based approach at the anticipated rate. On the other hand, CenterWell Home Health expanded the nurse workforce through strategies for recruitment and retention. The management continued to make investments in clinical orientation, mentors, and technology aimed at minimising administrative work and driving time for doctors. We give Humana a ‘Hold’ rating with a revised target price.