Humana Gets Bullish Calls From Baird, Barclays On Medicare Advantage Recovery

• According to The Fly, Baird raised its price target to $596 from $390 and upgraded Humana to 'Outperform', citing greater confidence in its 2028 adjusted EPS potential.
• Barclays raised its price target to $582 from $515, maintaining 'Overweight' and pointing to a 93% bonus mix after contract-rating improvements.
• Humana said 95% of its Medicare Advantage members are enrolled in plans rated at least four stars for 2027, compared with 25% of members in four-star-or-higher plans for 2025.

Humana Inc. (HUM) shares surged in premarket trading Friday after a rebound in Medicare Advantage star ratings strengthened the insurer's outlook for 2028 quality bonus payments, prompting Baird to upgrade the stock and Barclays to raise its price target.

The ratings recovery has renewed optimism about Humana's earnings potential, with both firms pointing to significant upside over the next two years.

HUM shares were up about 14% in premarket trading on Friday, at the time of writing.

Baird Sees Greater Confidence In Humana’s Earnings Potential

According to The Fly, Baird raised its price target to $596 from $390, saying it has greater confidence in Humana’s ability to generate more than $35 in adjusted earnings per share in 2028.

The firm cited Humana’s conservative benefits and bids, improved Stars performance following the latest Centers for Medicare & Medicaid Services (CMS) announcement, and an expected deceleration in national Medicare Advantage cost trends. Baird also sees “substantial upside” as investors increasingly value Humana on recovering earnings.

Barclays Points To 93% Bonus Mix

Barclays raised its price target to $582 from $515 while maintaining an ‘Overweight’ rating, The Fly reported.

The analyst said Humana recovered all its large 3.5-star contracts, including H5216, restoring its bonus mix to 93%. Barclays sees this as providing a “clear path” to more than $40 in 2028 earnings per share (EPS).

Why The CMS Ratings Matter For 2028

CMS released its 2027 Medicare Advantage star ratings on Thursday, October 8. The ratings determine eligibility for quality bonus payments that affect insurers’ payments in 2028.

Humana’s largest Medicare Advantage contract, H5216, improved from 3.5 stars to 4, returning above the bonus threshold. The contract covers approximately 2 million members.

The improvement follows a setback in the 2025 ratings, when H5216 fell from 4.5 stars to 3.5. That downgrade contributed to a decline in the share of Humana members enrolled in plans rated four stars or higher. The latest rating restores the contract’s eligibility for quality bonus payments in 2028.

Humana Reports Improvement Across Its 2027 Star Ratings

Separately, Humana said 95% of its Medicare Advantage members are enrolled in plans rated 4 stars or higher for 2027, including 42% in plans rated 4.5 stars. The company added 11 Medicare Advantage contracts rated 4 stars or higher compared with the prior year, bringing the total to six contracts rated 4.5 stars and 12 rated 4 stars.

Humana also reported improvements in care measures compared with the prior year, including 663,000 more care opportunities met and 534,000 additional members completing an annual preventive visit. 

CEO Jim Rechtin said the improved ratings reflect the work of thousands of Humana employees to help members access high-quality care and coordinated support to improve their health.

Retail View On HUM

On Stocktwits, retail sentiment around HUM turned 'bullish' as message volume over the past 24 hours reached 'high' levels.

HUM shares are up more than 46% year to date.

Also read: CVS Stock: TD Cowen Warns Of Bottom-Line Pressure For CVS Health Amid Star Ratings Setback

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