Humana shares fell 6.5% following the company's 2026 earnings guidance of at least $9 per share, significantly below the Bloomberg consensus of $11.87. The stock has declined 29% year to date through Tuesday's close. Management attributed the conservative outlook to higher medical costs and government reimbursement constraints. The company expects individual Medicare Advantage enrollment to rise approximately 25% in 2026, with about 1 million individuals already enrolled. However, Humana projects its individual Medicare Advantage business will lose money in 2026 with margins just below break even, partly due to lower government quality ratings that reduce payments. The federal government's proposal to keep 2027 payment rates flat presents an additional profitability headwind. Multiple analysts issued downgrades and lowered price targets following the guidance announcement, including RBC Capital Markets, TD Cowen, UBS, and Cantor Fitzgerald.
Read full analysisHumana shares fell 6.5% following the company's 2026 earnings guidance of at least $9 per share, significantly below the Bloomberg consensus of $11.87. The stock has declined 29% year to date through Tuesday's close. Management attributed the conservative outlook to higher medical costs and government reimbursement constraints. The company expects individual Medicare Advantage enrollment to rise approximately 25% in 2026, with about 1 million individuals already enrolled. However, Humana projects its individual Medicare Advantage business will lose money in 2026 with margins just below break even, partly due to lower government quality ratings that reduce payments. The federal government's proposal to keep 2027 payment rates flat presents an additional profitability headwind. Multiple analysts issued downgrades and lowered price targets following the guidance announcement, including RBC Capital Markets, TD Cowen, UBS, and Cantor Fitzgerald.
Humana is one of the largest U.S. health insurers, with the majority of its revenue derived from Medicare Advantage plans serving seniors. Unlike more diversified rivals such as UnitedHealth Group, Humana's heavy concentration in Medicare Advantage makes it acutely sensitive to government reimbursement rates and quality-based bonus payments — the exact pressures driving its current earnings crisis.