HUM - Embedded Expectations Analysis - 2019 09 16
Humana Inc. (HUM:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.5x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about their investments, EPS headwinds, and their ability to meet EBITDA guidance.Specifically, management may be exaggerating the value of their relationship with value-based care providers, and they may lack confidence in their ability to successfully leverage their value-based pilot program. In addition, they may lack confidence in their ability to invest for sustainable value creation and create value in their Group and Specialty segment. Furthermore, they may have concerns about the impact of weekday seasonality headwinds on EPS, and may lack confidence in their ability to meet their revised 2019 EBITDA guidance.
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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