New York, Feb 12, 2026, 18:26 EST — After-hours
Shares of Humana Inc (HUM.N) ended Thursday up 1.96% at $178.83, breaking a three-day slide and sticking close to that price in after-hours trading. Around 3.3 million shares changed hands, well above the 50-day average of 1.9 million. This came as the S&P 500 dropped 1.57% and the Dow lost 1.34%. 1
Humana slashed its 2026 forecast Wednesday after warning of a blow from lower Medicare Advantage Star Ratings. The company now sees adjusted EPS for 2026 at a minimum of $9, well below the average analyst call for $11.92. CFO Celeste Mellet told investors the ratings drop would carve $3.5 billion out of profits, though Humana still targets about 25% growth in individual Medicare Advantage membership. Only about 45% of members are expected in 4-star or better plans. Star Ratings, which range from one to five, are tied directly to bonus payments. “The big increase in membership looks likely to cut into margins further,” Morningstar’s Julie Utterback said. CEO Jim Rechtin’s take: “We will adapt to the rate notice once it is final.” 2
The rate outlook hasn’t settled. The Centers for Medicare & Medicaid Services flagged a proposed CY2027 Medicare Advantage advance notice that points to a net average payment bump of just 0.09% year-over-year. Comments are open until 11:59 p.m. ET on Feb. 25. The agency aims to release its final rate announcement by April 6. 3
Wall Street analysts weren’t shy on Thursday. RBC Capital downgraded Humana to “sector perform” from “outperform” and chopped its price target way down to $189 from $322, Marketbeat reported. Cantor Fitzgerald held its “neutral” call but trimmed the target to $201. Leerink Partners opted for $185, sticking with “market perform.” Jefferies, meanwhile, dropped its target to $235 but stuck to its “buy” stance, according to the same report. 4
Humana’s filing spelled out the groundwork for the new pricing. In an exhibit attached to its Feb. 11 Form 8-K, the company posted a GAAP loss of $6.61 per share for the fourth quarter and an adjusted loss of $3.96. The insurance segment benefit ratio—essentially the slice of premiums going toward medical care—came in at 93.1%. For 2026, Humana set guidance at no less than $8.89 per share GAAP and at least $9.00 adjusted. Humana also maintained its outlook for roughly 25% growth in individual Medicare Advantage membership. “We were pleased with our solid financial performance and operational progress in 2025,” Rechtin said. 5
Management struck a cautious tone in its prepared remarks released this day, flagging that its initial 2026 outlook is more conservative than usual. The company projects a 2026 insurance segment benefit ratio of roughly 92.75%, give or take 25 basis points (with a basis point equal to one-hundredth of a percent). Retention jumped by over 500 basis points during the annual election period, management said, while it stuck with its forecast that around 45% of Medicare Advantage members will be in 4-star-or-better contracts in 2026. 6
For traders, the focus isn’t just a single quarter—it’s how the book shakes out when bonuses and reimbursement formulas get reset. Humana has to figure out how to boost growth without shelling out too much, and those quality scores need to climb quickly if the company wants to hold on to bonus dollars.
For weeks, nerves have been running high across the sector. Medicare Advantage leans hard on policy, and when medical usage ticks up, those thin margins feel the pressure. Humana sits near the top of that risk pile—investors typically hit the stock on any Stars or reimbursement surprises, often well ahead of the actual claims data.
The rebound doesn’t always last. Should medical utilization remain elevated through 2026, or if 2027’s ultimate rate decision comes in lower than what insurers want, that pressure will hit pricing and benefits directly — and what was membership growth could easily flip into a headwind.
Coming Friday, several more broker downgrades are expected, while the policy countdown continues. Investors have eyes on the Feb. 25 CMS comment deadline, with the last word on the CY2027 rate set to arrive by April 6.
