Humana still sees FY adj EPS about $17, est. $17.02

Humana still sees FY adj EPS about $17, est. $17.02

Humana Inc. (HUM) reported its second-quarter 2025 earnings on July 30, 2025, with adjusted earnings per share (EPS) of $6.27, missing the Zacks Consensus Estimate by 0.8% [2]. The company's shares have since added about 19.2% in value, outperforming the S&P 500 [2]. Despite the miss, several positive trends emerged that analysts are monitoring closely.

Key Financial Highlights

- Revenue: Humana's adjusted revenues of $32.4 billion advanced 10.2% year over year, exceeding the consensus estimate by 1.9% [2].
- Operating Expenses: Total operating expenses escalated 10.2% year over year to $31.3 billion, primarily driven by higher benefits and operating costs [2].
- Net Income: Net income totaled $543 million, down 19.9% year over year, mainly due to elevated expense levels [2].

Segmental Performance

- Insurance Segment: Adjusted revenues of $31.1 billion improved 9.6% year over year, driven by increased per-member Medicare premiums and a growing customer base in stand-alone prescription drug plans [2].
- CenterWell Segment: Services revenues climbed 27.3% year over year to $1.4 billion, contributing to the overall positive trend [2].

Analyst Reactions

Analysts have reacted to the earnings report with varying opinions. Raymond James Financial raised its rating on Humana from "market perform" to "outperform" and set a $315.00 target price [1]. Truist Financial, however, lowered its target price from $280.00 to $260.00 and set a "hold" rating [1]. Despite the mixed signals, seven analysts have rated the stock with a "Buy" rating, while sixteen have assigned a "Hold" rating, with an average rating of "Hold" and a consensus target price of $283.29 [1].

Future Outlook

Humana has set its FY 2025 guidance at $17.00-$17.02 EPS [1]. The company's recent earnings report indicates that while it missed the EPS estimate, there are positive trends in revenue growth and segmental performance. Investors should continue to monitor the company's progress, particularly in the CenterWell segment, which showed strong performance.

Conclusion

Humana's Q2 earnings report highlighted a mixed bag of results, with revenue growth and segmental performance offsetting the EPS miss. While the company faces challenges in managing operating expenses, the positive trends in revenue and segmental performance suggest that Humana is well-positioned for future growth. Investors should keep an eye on the company's upcoming earnings releases and analyst ratings to gauge its performance moving forward.

References

[1] https://www.marketbeat.com/instant-alerts/filing-t-rowe-price-investment-management-inc-reduces-holdings-in-humana-inc-hum-2025-08-24/
[2] https://www.nasdaq.com/articles/why-humana-hum-192-last-earnings-report