Baird Upgrades Humana to Outperform From Neutral, $596 Price Target

Humana's stock surged 15% to $447 after reporting improved Medicare Advantage Star Ratings, with 95% of members in highly-rated plans. CVS Health fell 3% to $85, while UnitedHealth Group rose 0.4% to $372.24. The Healthcare Select Sector ETF remained unchanged, indicating a sector reordering rather than a broad advance.

Humana (HUM) shares rose 14% premarket after Baird upgraded it to 'Outperform' with a $596 price target, citing improved Medicare Advantage star ratings and 2028 EPS potential. Barclays raised its target to $582, noting a 93% bonus mix. Humana reported 95% of its members are in plans rated at least four stars for 2027.

Humana's stock rose 14% after its Medicare Advantage plans saw a significant improvement in quality ratings, with 95% of members in 4-star or higher plans for 2027. This could bring $3.6B in additional revenue. CVS Health's Aetna saw a decline in ratings, with 69% of members in 4-star or higher plans, down from 81%.

Humana's shares rose 15% premarket after analysts identified it as the top beneficiary of 2027 Medicare star ratings. 95% of its Medicare Advantage members will be in plans rated 4 stars or higher, up from 20% in 2026. Analysts expected 60-70%. Higher ratings lead to government bonus payments and boost enrollment. Humana's ratings outperform larger rivals like UnitedHealth and CVS Health, according to J.P. Morgan.

Humana Inc (HUM) shares rose 13% after CMS upgraded its Medicare Advantage contract to a four-star rating, restoring eligibility for quality bonus payments affecting 2.4 million members. The company's GF Value™ suggests it is 1.5% overvalued at $387.12, with a GF Score™ of 83/100. Insiders have been net buyers over the past year.

Humana reported exceeding its Top Quartile goal for 2027 Medicare Advantage Star Ratings, with Stars revenue PMPM 10% above peer median. The company reaffirmed its FY2026 adjusted EPS guidance of at least $9.00. Humana plans to treat some 2028 outperformance as a one-time benefit for investments and shareholder return. A virtual investor update is scheduled for December 10, 2026.