New York, Feb 12, 2026, 18:26 EST — After-hours
Humana Inc (HUM.N) shares rose 1.96% to close at $178.83 on Thursday, snapping a three-day losing streak, and held near that level after the bell. Trading volume climbed to about 3.3 million shares, above its 50-day average of roughly 1.9 million, even as the S&P 500 fell 1.57% and the Dow slid 1.34%. (MarketWatch)
The move comes after Humana’s downbeat 2026 outlook on Wednesday, when it flagged a hit from lower Medicare Advantage Star Ratings. The insurer said it expects 2026 adjusted earnings per share of at least $9 versus an $11.92 average estimate, and CFO Celeste Mellet said lower ratings would pressure profits by $3.5 billion even as the company targets about 25% growth in individual Medicare Advantage membership; roughly 45% of members are expected to be in 4-star-or-better plans. Star Ratings run from one to five and feed into bonus payments; Morningstar’s Julie Utterback said “the big increase in membership looks likely to cut into margins further”, and CEO Jim Rechtin added, “We will adapt to the rate notice once it is final.” (Reuters)
That rate backdrop is still moving. The Centers for Medicare & Medicaid Services said the proposed CY2027 Medicare Advantage advance notice implies a net average year-over-year payment increase of 0.09%, with comments due by 11:59 p.m. ET on Feb. 25; the agency said the final rate announcement will be published no later than April 6. (Centers for Medicare & Medicaid Services)
Wall Street also piled in with its own math on Thursday. Marketbeat reported RBC Capital cut Humana to “sector perform” from “outperform” and slashed its price target to $189 from $322; Cantor Fitzgerald lowered its target to $201 and kept a “neutral” rating, while Leerink Partners cut its target to $185 and maintained “market perform.” Jefferies lowered its target to $235 while keeping a “buy” rating, according to the report. (MarketBeat)
Humana’s filing laid out the starting point for that repricing. In an exhibit to its Feb. 11 Form 8-K, the company reported a fourth-quarter GAAP loss of $6.61 per share and an adjusted loss of $3.96, alongside a 93.1% insurance segment benefit ratio — the share of premiums spent on medical care. Humana introduced 2026 guidance of at least $8.89 a share on a GAAP basis and at least $9.00 adjusted, and reiterated it expects about 25% growth in individual Medicare Advantage membership; Rechtin said, “We were pleased with our solid financial performance and operational progress in 2025.” (SEC)
In prepared remarks released the same day, management said it was being more conservative than typical in its initial 2026 outlook and expects the 2026 insurance segment benefit ratio to be about 92.75%, plus or minus 25 basis points (a basis point is one-hundredth of a percentage point). The company also said retention improved by more than 500 basis points during the annual election period and reiterated the expectation that about 45% of Medicare Advantage members will sit in 4-star-or-better contracts in 2026. (SEC)
For traders, this is less about one quarter and more about what the book looks like when bonuses and reimbursement get recalibrated. Humana has to grow without overpaying for it, and it has to lift quality scores fast enough to keep bonus dollars from leaking away.
The broader group has been twitchy for weeks because Medicare Advantage is policy-heavy and margin-thin when medical use rises. Humana is one of the most exposed to that trade, and investors tend to punish surprises on Stars and reimbursement before they show up in claims.
But the rebound can fade quickly. If medical utilization stays high into 2026, or if the final 2027 rate decision lands tighter than insurers hope, the squeeze shows up in pricing and benefits — and membership growth can turn from a help into a drag.
Next up: more broker note cuts into Friday’s session, plus a policy clock that is already ticking. Markets will watch the CMS comment deadline on Feb. 25 and the final CY2027 rate announcement due by April 6.
