UNH - Humana: Where To Buy This
2024-04-02 10:15:22 ET
Summary
- Humana's earnings downgrade in January was worse than the stock's drop, and it has continued to underperform the healthcare sector.
- Analysts' optimistic growth projections for Humana are detached from reality, especially considering the potential for a recession.
- We identify our short- and long-term targets for Humana stock and tell you where you can buy for a trade and where you can buy to invest.
It is always tempting to buy the dip. We are not referring to complementing your breadstick order, though. We are referring to the urge to buy what has fallen and become "cheap." Humana Inc. ( HUM ) fell into that category in January as it took an axe to its earnings estimates. We were not impressed and the decline in earnings power of the company was far worse than the stock's drop. Back then, we stated :
Humana: Where To Buy ThisBut Humana Inc.'s level of earnings downgrade is pretty rare and almost just as rare as the first day of such a selloff being the bottom. We think this likely visits at least $325 and possibly breaks $300 in the next few months. If we really had to play the bull-side, we would play it with a $300 strike covered call or cash secured put.