HUM - Jim Cramer just turned his back on Humana stock

2024-01-18 11:14:00 ET

Humana Inc (NYSE: HUM) is in focus today after famed investor Jim Cramer turned its back on the for-profit health insurance company.

Humana lowered its earnings outlook today

The New York listed firm cited higher-than-expected medical costs this morning as it lowered its guidance for the full-year adjusted per-share earnings.

Humana now expects to earn $26.09 a share on an adjusted basis in 2023 versus its previous outlook for $28.25 a share (at least).

That’s what did not sit well with the Mad Money host – who pulled out of his entire position in (85 shares in total) at a 14% loss on Thursday.

Note that Wall Street still has a consensus “overweight” rating on Humana stock even though it is now down over 25% versus its 52-week high.

Humana raised outlook for medical cost ratio

Humana now expects its medical cost ratio to print at 91.4% in its current financial quarter – well above its previous guidance for 89.5%.

On Thursday, the Louisville-headquartered firm also said membership growth in its Medicare Advantage plan will come in at about 100,000 in 2024 (up 1.8% YoY).

That also pushed Jim Cramer to exit his position in Humana as it failed to meet his expectations of above-trend growth. All in all, the Mad Money host said his original investment thesis to own shares of the health giant no longer holds after today’s announcements.

In December, Cigna Group abandoned its plans of a merger with Human Inc as Invezz reported here .

The post Jim Cramer just turned his back on Humana stock appeared first on Invezz