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Humana Lifts FY22 Earnings View Above Market; Initiates Mid-Term Outlook

Health insurer Humana Inc. (HUM) Thursday raised its outlook for fiscal 2022 above market estimates, and also introduced mid-term adjusted earnings per share target of $37 in 2025.

In pre-market activity on the NYSE, Humana shares were gaining around 5 percent to trade at $481.

For fiscal 2022, the company now expects earnings per share on a reported basis of approximately $23.08, compared to previous estimate of approximately $20.30. Adjusted earnings per share is now expected to be approximately $25, up from the previous guidance of approximately $24.75.

On average, 22 analysts polled by Thomson Reuters expect earnings of $24.83 per share for the quarter. Analysts' estimates typically exclude special items.

The updated adjusted guidance reflects 21 percent growth compared to last year, driven by the continued lower-than-expected medical cost trends in Medicare Advantage and Medicaid businesses.

Humana will host a virtual Investor Day today.

The company's mid-term adjusted earnings per share target for fiscal 2025 of $37 per share represents a compelling 14 percent compounded annual growth rate over its updated fiscal 2022 outlook for adjusted earnings.

Humana said it expects to grow enterprise earnings around 10 percent per year, before factoring in an additional 1 to 2 percent of anticipated earnings growth.

The company also projects continued earnings growth in 2026 and beyond at or above the earnings per share growth trends reflected in its new mid-term target.

The company's third quarter 2022 earnings release is scheduled on November 2.

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