HUM
Humana Inc.
$397.60
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 43.1% above fair value
You pay
$397.60
Bear
$222.33
Fair
$277.92
Bull
$333.50
Bear
$222.33
-44.1%
$20.00 × 10x P/E
Fair
$277.92
-30.1%
$20.00 × 12x P/E
Bull
$333.50
-16.1%
$20.00 × 15x P/E
Key Value Driver
Normalized P/E multiple (12x base case)
Implied Market Multiple
19.9x
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 $343.06 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $277.92 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.
Wall Street's average price target is $343.06 (from 44 analysts). Our estimate is 27% 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