UPDATE: BMO Capital Markets Reiterates Humana at Market Perform After a Positive Investor Day
In a report published Tuesday, BMO Capital Markets reiterated Humana (NYSE: HUM) at Market Perform after a positive investor day, and maintained a price target of $78.
BMO Capital Markets noted, "Humana held its biennial Investor Day today at its headquarters in Louisville. Outlined for the day were potential headwinds brought on by the expected era of health reform, for which we believe Humana is wearing a sturdy helmet. This is backed by the company's investment in MSOs and technology to meet its rejuvenated care model and attain cost savings. HUM continues to move forward after making a comeback from 2Q's difficulties and is showing no signs of slowed momentum. Thus far, Humana has achieved 9% heading toward its “15 percent solution,” which aims to decrease its MA costs to 15% below the government's costs for Medicare. Management issued a conservative view on utilization, which we have not taken. Our estimates are bullish for the company. HUM shares trade at 9.2x our 2013 EPS estimate of $7.83. [We] believe HUM merits a forward P/E of 10x, which produces a price target of $78, and we continue to rate HUM shares Market Perform."
Humana closed at $68.29 on Tuesday.
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