Humana (HUM) plunged after warning that 2024 earnings will be only about half of Wall Street consensus due to higher Medicare Advantage costs. Other health insurers, including Dow giant UnitedHealth (UNH), Cigna (CI) and Aetna-owner CVS Health (CVS) retreated as well.




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Humana expects 2024 earnings of about $16a share adjusted vs. analyst views of $29.14. The insurer expects the higher Medicare Advantage medical costs in Q4 2023 to continue through this year.

Humana also pulled 2025 guidance.

On Thursday, Humana lost 11 cents a share in the fourth quarter, with full-year 2023 profit of $26.09. On Jan. 18, Humana warned that 2023 profit would be around $26.09 a share vs. the then-analyst consensus for $28.29.

The health insurer blamed said elevated Medicare Advantage costs due to higher-than-anticipated inpatient utilization and higher paid claims for outpatient physician services, outpatient surgeries and supplemental benefits.

Humana Stock

Humana stock plunged 13% in early Thursday trade, signaling the lowest level since April 2020. Shares had already fallen 12% this year, including 8% on Jan. 18.

UnitedHealth stock sank 3%. Cigna, CVS Health, Molina Healthcare (MOH) and Centene (CNC) also fell about 3%. All have stumbled in 2024 in the wake of Humana’s original Jan. 18 warning.

Please follow Ed Carson on Threads at @edcarson1971, X/Twitter at @IBD_ECarson and Bluesky at @edcarson.bsky.social for stock market updates and more.

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