Evercore ISI has reduced its 12-month price target for Humana (NYSE: HUM) to $180.00 from $260.00 but retained an "In Line" rating on the health insurer's shares. The move follows Humana's 2026 earnings-per-share guidance that calls for more than $9, a figure Evercore says is consistent with its own forecast but under consensus on the Street.
Humana's current share price of $175.40 sits close to its 52-week low of $180.89, and technical indicators noted in market data show the stock in oversold territory based on its relative strength index.
Evercore pointed to a higher medical loss ratio as the primary driver for reduced near-term profitability. The firm connected that deterioration in margins to what it described as an outsized 25% increase in individual Medicare Advantage enrollment, a level that outpaces the company's reported 20% growth during the Annual Enrollment Period.
The analyst described Humana's member growth as "remarkable" when compared with the modest industry-wide expectation of 0-2% growth in Medicare Advantage membership. Evercore further observed that some competitors, including UnitedHealth and CVS, have experienced declines in membership.
Evercore cautioned about the uncertainty embedded in Humana's targets, warning of the "material risk that margin profile of new members may turn out worse than HUM projections, pressuring EPS."
Despite those concerns, a separate valuation view noted in market analytics considers Humana undervalued on a Fair Value basis. The company has a track record of dividend payments stretching 15 consecutive years and offers a current yield of 1.95%.
The sector's recent volatility has been amplified by several analyst actions and policy developments. Guggenheim reiterated a Buy rating on Humana with a $312.00 price target as the insurer approaches its fourth-quarter 2025 earnings report, while Morgan Stanley moved more pessimistic, downgrading Humana from Equalweight to Underweight and lowering its price target to $174.00. Morgan Stanley cited concerns about Humana's 2026 bid strategy and policy risks following an unfavorable Advance Rate Notice.
Policy updates also weighed on investor sentiment. The Centers for Medicare & Medicaid Services announced a nominal 0.09% increase in Medicare Advantage payment rates for 2027, a result beneath analyst expectations that contributed to a sector-wide selloff and pressured share prices across health insurers, including Humana.
On the strategic front, Humana announced a partnership with Atlas Oncology Partners to bolster cancer care for its Medicare Advantage members in Tennessee and Mississippi beginning January 1, 2026. The initiative is designed to streamline oncology services by integrating oncology physicians, radiology, and other care professionals to provide more coordinated treatment for members.
The combination of a reduced price target from Evercore, diverging analyst stances, muted payment rate updates, and enrollment-driven margin questions has introduced a mix of valuation and execution considerations for investors following Humana. Market participants will likely closely monitor upcoming earnings and enrollment trends as they assess the company's path to achieving its 2026 EPS guidance.