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Humana Inc HUM

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Humana Gives Weak Near-Term Outlook on Surging Medical Utilization; Shares Still Fairly Valued

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Narrow-moat Humana delivered strong third-quarter results but trimmed its 2021 outlook based on higher expected medical utilization trends in the fourth quarter. Even if we tweak our near-term estimates for management's expectations, we would not materially change our $440 fair value estimate, and shares remain about fairly valued, in our view.

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Company Profile

Business Description

Humana is one of the largest private health insurers in the U.S. with a focus on administering Medicare Advantage plans. The firm has built a niche specializing in government-sponsored programs, with nearly all its medical membership stemming from individual and group Medicare Advantage, Medicaid, and the military's Tricare program. The firm is also a leader in stand-alone prescription drug plans for seniors enrolled in traditional fee-for-service Medicare. Humana offers employer-based plans primarily for small businesses along with specialty insurance offerings such as dental, vision, and life. Beyond medical insurance, the company provides other healthcare services, including primary-care services, at-home services, and pharmacy benefit management.

Contact
500 West Main Street
Louisville, KY, 40202
T +1 502 580-1000
Sector Healthcare
Industry Healthcare Plans
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 48,700

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