Humana Bumps Up FY22 Profit Outlook, Stops Factoring COVID-19 Impact In Guidance, Shares Jump

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  • American health insurance company Humana Inc HUM revealed an adjusted EPS target for FY 2025 of $37, representing a 14% compounded annual growth rate over the company's updated FY 2022 adjusted EPS outlook.
  • The company expects to grow enterprise earnings by approximately 10% per year before factoring in an additional 1% - 2% of anticipated earnings growth driven by the company's commitment to improving operating leverage by approximately 20 basis points annually on a business mix adjusted basis. 
  • In addition, Humana expects capital deployment to contribute approximately 2% to annual EPS growth.
  • Humana has also increased its GAAP and adjusted EPS guidance for FY22 to approximately $23.08 from its previous estimate of approximately $20.30 and adjusted EPS to approximately $25 versus approximately $24.75 expected earlier.
  • The updated adjusted guidance reflects 21% growth compared to FY 2021 adjusted EPS results, driven by the continued lower-than-expected medical cost trends in the company's Medicare Advantage and Medicaid businesses and the lack of a COVID-19 headwind materializing.
  • The company no longer deems it necessary to hold a discrete COVID-19 headwind in its full-year guide.
  • Humana will release its Q3 FY22 earnings on November 2.
  • Price Action: HUM shares are up 6.98% at $490.90 on the last check Thursday.
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