HUM
Humana Inc.
$307.95
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 19.7% above fair value
You pay
$307.95
Bear
$205.76
Fair
$257.20
Bull
$308.64
Bear
$205.76
-33.2%
$20.00 × 10x P/E
Fair
$257.20
-16.5%
$20.00 × 12x P/E
Bull
$308.64
+0.2%
$20.00 × 15x P/E
Key Value Driver
Normalized P/E multiple (12x base case)
Implied Market Multiple
15.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $274.00 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $257.20 per share.
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: $82.03 (below our primary estimate by 67%). Large gaps may signal the dividend doesn't reflect full earning power.
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