In a research report released Monday, Cantor analyst Joseph France maintained a Buy rating on Humana Inc (NYSE:HUM) and raised the price target to $230 (from $160), to reflect the managed care group’s revaluation, and HUM’s position as the insurer most focused on Medicare Advantage. The new price target represents a potential upside of nearly 7% from where the stock is currently trading.
France noted, “Dow Jones reported Friday afternoon (5/29/15) that Humana is working with Goldman Sachs regarding a potential sale, and that potential bidders include Aetna Inc. (AET) and Cigna Corporation (CI, NC). The managed care group rallied on this news, with AET closing up 1.36%, CI up 3.65%, Centene Corp. (CNC) up 4.05% and HUM up 20.31%, compared with a 0.63% decline in the S&P 500. Based on Friday’s closing prices, the average P/E on 2015 earnings estimates in our managed care coverage universe is 22.2x. A 15% premium to the non-Medicaid names would imply upside to $203, a 20% premium would imply $212 and 30% would imply $230.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joseph France has a total average return of 24.3% and a 82.4% success rate. France has a 46.2% average return when recommending HUM, and is ranked #125 out of 3610 analysts.