Leerink Swann Maintains Humana (HUM) Market Perform Rating

Leerink Swann analysts Jason Gurda and Neil Bhalodkar maintained their Market Perform rating for shares of Humana Inc. (NYSE: HUM) with a 12-month valuation range of $56-$59.

The analysts said that although Humana Inc. is likely to lose 5% of its PFFS members in 2011, it could also gain market share from competitors without the same extensive network offered by Humana, which could give a boost to the 2011 estimates.

They also wrote that Humana will most likely focus on hanging on to earnings growth generated in recent years, over generating new growth.

The Leerink Swann analysts wrote, "we recently visited with management at HUM to discuss business trends and expectations. Although we came away with increased confidence in the company's ability to navigate upcoming Medicare Advantage (MA) changes, we believe earnings growth at HUM over the next few years is likely to trail some of its peers due to likely MA rate cuts and competitive challenges in its commercial business. Near term, however, we believe there may be some upside to estimates due to strong MA enrollment growth and the potential for a positive private fee for service (PFFS) conversion."