HUM - Embedded Expectations Analysis - 2018 10 24
Humana Inc. (HUM:USA) currently trades above recent averages relative toUAFRS-based (Uniform) Earnings, with a 24.7x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management has concerns about their recent mergers, lower inpatient rates, and their ability to meet guidance
Specifically, management may lack confidence in the sustainability of their improved medical ratio, and may have concerns about the potential of their Kindred at Home and Curo Health Services acquisitions. Moreover, they may lack confidence in their ability to sustain robust performance in FY 2019, and may be exaggerating their excitement about the future of the company. Furthermore, they may lack confidence in their ability to drive meaningful EPS growth, and to drive value for their customers and shareholders. They may also lack confidence in their ability to find acquisition targets in FY 2019, and to sustain their inpatient admissions rates
Humana is a holding company. Through its subsidiaries, the company is a health and well-being company. The company manages its business with three segments: Retail, which consists of products sold on a retail basis to individuals including medical and supplemental benefit plans, such as Medicare and state-based Medicaid Contracts; Group and Specialty, which consists of employer group commercial fully-insured medical and specialty health insurance benefits, including dental, vision and life insurance benefits, as well as administrative services only; and Healthcare Services, which includes pharmacy solutions, provider services, clinical care services, and predictive modeling and informatics services
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