HUM
Humana Inc.
$422.07
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 68.8% above fair value
You pay
$422.07
Bear
$200.00
Fair
$250.00
Bull
$300.00
Bear
$200.00
-52.6%
$20.00 × 10x P/E
Fair
$250.00
-40.8%
$20.00 × 12x P/E
Bull
$300.00
-28.9%
$20.00 × 15x P/E
Adjust Assumptions
12.5x
20.0$
Key Value Driver
Normalized P/E multiple (12x base case)
Implied Market Multiple
21.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (44 analysts)
$469.89
Divergence from AlphaVal
47%
Summary
Applying a 12x P/E to adjusted EPS of $20.00, the base-case value is $250.00 per share. DDM cross-check: $71.87.
Warnings
The company's reported profits differ from official accounting profits by 103%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $71.87 (below our primary estimate by 71%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $469.89 (from 44 analysts). Our estimate is 47% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples