Wedbush Securities Reiterates Outperform Rating, $102 PT on Humana

In a report published Monday, Wedbush Securities reiterated its Outperform rating and $102.00 price target on Humana

. Wedbush Securities noted, “4Q12 EPS of $1.19 was above consensus of $1.06 driven by lower retail and group MLR. Retail MLR of 82.6% (82.8% ex $15M PPD) was below consensus of 84%, but above our 82.1%. Group MLR of 87.1% was below consensus of 88.2%, but above our 86.7%. SG&A of 17.3% was 48bps below our estimate, but 12bps above consensus. Revenue of $9.6B was $0.3B below our estimate of $9.9B, up 6% from the prior year. MA risk enrollment was 2.3M, 6.3K below our estimate of 2.3M lives and total PDP enrollment was 3M, 7.6K below our estimate. CFO of $0.2B was 1.1x net income, debt-to-cap increased 711bps to 23% and free cash at the parent is $346M, down from $522M in 3Q12 post repurchases and dividends. Humana repurchased 6.25M shares during the year for $460M. Days claims payable were 48.5 days, down 3.1 days sequentially.” Humana closed on Friday at $75.35.