Humana AB (publ) Just Beat EPS By 53%: Here's What Analysts Think Will Happen Next

There's been a notable change in appetite for Humana AB (publ) (STO:HUM) shares in the week since its first-quarter report, with the stock down 11% to kr39.25. Revenues of kr2.5b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of kr1.44 an impressive 53% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following last week's earnings report, Humana's dual analysts are forecasting 2025 revenues to be kr10.3b, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 50% to kr5.88. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr10.5b and earnings per share (EPS) of kr5.25 in 2025. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the substantial gain in to the earnings per share numbers.

Check out our latest analysis for Humana

The consensus has made no major changes to the price target of kr50.00, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.1% by the end of 2025. This indicates a significant reduction from annual growth of 6.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Humana is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Humana following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Humana going out as far as 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Humana that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.