Humana (HUM) Stock: Skyrocketing On Guidance Updates

Humana Inc (NYSE: HUM)

Humana is having an incredible time during today’s trading session, and for good reason. The company released guidance for the current quarter and full year. This guidance proved to be positive. Today, we’ll talk about the guidance update, how the stock reacted to the news, and what we can expect to see from HUM moving forward.

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HUM Releases Guidance Update

As mentioned above, Humana is having a strong day in the market after updating guidance for the second quarter and the full year. According to the update, the increase in guidance reflects better-than-expected performance in healthcare services as well as Individual Medicare Advantage. However, the increase was partially offset by weaknesses seen in the individual commercial medical business. Here’s what we saw from the update…

  • Second Quarter Guidance – Previously, HUM announced that it was expecting to generate earnings in the amount of $2.15 per share during the quarter. This figure fell short of analyst expectations of $2.19 per share. However, in today’s update, the company said that it is now expecting for Q2 earnings to come in at $2.28 per share.
  • Full Year Guidance – Through the full year of 2016, the company previously expected earnings per share to come in at $8.85. However, in today’s update, HUM announced that it now expects full year earnings to be at least $9.25 per share.

How The Market Reacted To The News

As investors, we know that the news moves the market. Any time positive news is released with regard to a publicly traded company, we can expect to see gains in the value of the stock associated with the company. Negative news will lead to declines. In this particular case, the news that was released was overwhelmingly positive. So naturally, we’re seeing strong gains on Humana today. Currently (2:25), the stock is trading at $170.02 per share after a gain of $11.61 per share or 7.33% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from HUM. First and foremost, let’s talk about the elephant in the room. Currently, the company is facing a lawsuit from the Department of Justice with regard to a proposed merger between Humana and Aetna. The DOJ believes that the merger of two massive companies will create competition issues for smaller companies. If this lawsuit doesn’t stop the merger, we will see the creation of a healthcare giant. This would be great for HUM.

However, regardless of whether or not the merger actually happens, I have an incredibly bullish opinion of what we can expect to see from the stock. HUM has become one of the most well known names in healthcare. This company continues to increase revenue and profits, as seen with today’s guidance update. All in all, this bull is running and will likely continue to do so.

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What Do You Think?

Where do you think HUM is headed moving forward and why? Join the discussion at TalkTRENDZ from CNA Finance.

[Image Courtesy of Pixabay]

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