Humana's integrated clinical model, furthered by its recent bid for Louisville, Ky.-based Kindred Healthcare's home health arm, is reviving Humana's medical cost competitive advantage, according to a recent Leerink Partners analysis.
Here are three takeaways from the report.
1. After meeting with Humana's C-suite, Leerink Partners determined the insurer is the sleeper managed care organization stock of 2018. Leerink Partners raised its price target for Humana by $25 to $325.
2. Leerink analysts said downside risk associated with Amazon's entry into healthcare through a partnership with JPMorgan Chase & Co. and Berkshire Hathaway is limited for Humana.
"Broader transformation in the healthcare landscape is not changing [Humana]'s enduring strategy of the intense consumer & clinical focus on care management for seniors. Downside risk from [Amazon] entry is more limited given the intense clinical focus for chronic management of seniors, a bridge too far."
3. Humana could consider growing its Medicaid target during the next two years, especially to support potential growth in dual special needs plans, according to the report. Leerink analysts said an organic strategy is more likely, and other merger and acquisition priorities could include Medicare Advantage deals.