|Back to main|
Humana Downgraded to Neutral - Analyst Blog
9/5/2013 5:51:00 PM
On Sep 4, 2013, we downgraded our recommendation on
) to Neutral from Outperform despite decent second quarter
results due to several operational issues being faced by the
company. This health care plan provider currently carries a Zacks
Rank #3 (Hold).
Moreover, there is a rise in membership from people with
pre-existing medical conditions and government plans have put
restriction on charging higher premiums from these people. As a
result benefit expenses are also rising and are taking a toll on
All these coupled with U.S. economic weakness account for the
waning operating cash flow of Humana. The first half of 2013 also
suffered significant decline in operating cash flow.
Further, implementation of programs from 2014, such as the ban
on annual and lifetime coverage caps, annual fees on health
insurance companies and excise tax on high premium insurance
policies, will likely increase expenses. All these are likely to
pressurize profits going forward.
Alongside, it is seeking growth through the inorganic path.
With this motive, it entered into an agreement to acquire
American Eldercare Inc., one of the leading nursing home
diversion services providers in Florida.
AETNA INC-NEW (AET): Free Stock Analysis Report
ASTELLAS PHARMA (ALPMY): Get Free Report
CENTENE CORP (CNC): Free Stock Analysis Report
HUMANA INC NEW (HUM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research