Humana shares slide as stagnant outlook offsets quarterly earnings beat

Humana posted an adjusted earnings per share of $7.61, comfortably surpassing the $7.22 expected by analysts, while revenue climbed to $40.87 billion. CFO Celeste Mellet attributed the growth to strong performance in the company’s insurance business and its CenterWell healthcare services unit, noting that medical and pharmacy cost trends aligned with internal projections. Despite these gains, the medical benefit ratio rose to 91.2% from 89.9% a year ago, reflecting the ongoing challenge of balancing premium collection with rising patient care expenses.

Cantor Fitzgerald analysts labeled the company’s decision to keep its 2026 adjusted profit outlook at $9 per share a disappointment, particularly compared to competitors who have recently raised guidance. While Mellet described medical costs as more stable, she acknowledged that pharmacy expenses remain elevated due to drug pricing and the introduction of new medications. Looking ahead, Humana is banking on adjustments to its 2027 Medicare Advantage plans to drive profitability, aiming for a sustainable pretax margin of at least 3% by 2028.