After hours: 5:10PM EDT
|Bid||287.01 x 1000|
|Ask||287.96 x 1200|
|Day's Range||285.44 - 293.46|
|52 Week Range||225.65 - 355.88|
|Beta (3Y Monthly)||1.09|
|PE Ratio (TTM)||15.68|
|Forward Dividend & Yield||2.20 (0.76%)|
|1y Target Est||N/A|
In 2019, insurance companies will be widening their Affordable Care Act plan offerings, expanding their roster of states to places like Pennsylvania, Georgia, and Nebraska, where the options have been limited. Yahoo Finance's Anjalee Khemlani joins The First Trade to discuss.
(Bloomberg Opinion) -- By all accounts, it was supposed to be a sleepy August for the U.S. corporate bond market. Three weeks ago, the thinking went something like this: Sure, the Federal Reserve would cut its benchmark lending rate on July 31, in what Chair Jerome Powell would call a “mid-cycle adjustment.” But Treasuries were already pricing in such a move on the short end. Further out on the curve, the 30-year yield was about 2.6%, still more than 50 basis points away from its all-time low. Ten-year yields were about 2%, which seemed like a comfortable range for both buyers and sellers. For company finance officers, it had the makings of a sellers’ market but one that would be around once summer drew to a close.Then things got crazy. The 30-year yield lurched lower by 8 basis points on Aug. 1, then 13 basis points on Aug. 5, then another 13 basis points on Aug. 12. After a one-day reprieve near its all-time low of 2.0882%, it cruised through that level, tumbling to as low as 1.914%. The rally was so intense that the U.S. Treasury Department made an unusual, unscheduled announcement that it was again exploring issuing 50- or 100-year bonds. Companies clearly felt they couldn’t afford to pass up this opportunity. In the first full week of August, CVS Health Corp., Humana Inc. and Welltower Inc. headlined $35 billion of debt sales among investment-grade firms, easily surpassing estimates. Then in the week through Aug. 16, more than $22 billion went through, including a rarely seen offering from Exxon Mobil to the tune of $7 billion. Market watchers expected that would just about wrap things up until after Labor Day on Sept. 2.Some finance officers had other ideas. 3M Co. borrowed $3.25 billion on Monday to help finance its acquisition of medical-products maker Acelity Inc. In total, issuers sold $6.65 billion of investment-grade debt on Aug. 19, already topping some predictions for $5 billion this week. Then on Tuesday, Bank of New York Mellon Corp. priced $1 billion at the lower end of its expected yield range, along with a handful of other borrowers with multimillion-dollar deals.All this is to say, companies are simple: They see staggering low yields, and they issue bonds. Investors, for their part, can’t get enough of them. The Bloomberg Barclays U.S. Corporate Bond Index has returned 13.3% so far in 2019. Over the past 12 months, the index is up 12.5%, compared with just 1.5% for the S&P 500 Index. The average spread on corporate bonds has widened to 122 basis points, from 107 basis points at the end of July, but that’s just because they couldn’t keep up with the relentless rally in Treasuries, not because of a lack of buyers. If Bank of America Corp. strategists led by Hans Mikkelsen are correct, the demand in credit markets has lasting power. They say the $16 trillion of negative-yielding debt globally has left investors — and particularly those outside the U.S. — with few alternatives besides purchasing companies’ debt. “There is a wall of new money being forced into the global corporate bond market,” they wrote on Aug. 16. “Given the near extinction of non-USD IG yield, foreign investors are forced to take more risk.”Of course, buying investment-grade bonds hardly qualifies as a speculative endeavor. Exxon Mobil, in fact, has the same credit rating as the U.S. government from both Moody’s Investors Service and S&P Global Ratings. On the other hand, Bloomberg News’s Jeannine Amodeo and Davide Scigliuzzo reported this week that three leveraged-loan sales that had been languishing in the U.S. market for weeks were pulled as investors sought higher-quality assets. Vewd Software became the fourth on Tuesday, scrapping a $125 million term loan due to market conditions. Leveraged loans, it should be noted, are floating-rate securities and so face weaker demand when the Fed appears poised to cut rates, as it does now. But for large, highly rated companies, their behavior in recent weeks is exactly what should be expected. Exxon Mobil issued 30-year bonds to yield 3.095%. In November, five-year Treasuries offered the same amount. 3M, rated a few steps below triple-A, priced 30-year debt to yield 3.37%, less than the going rate on long Treasury bonds just nine months ago. No matter how you slice it, they’re getting borrowing costs that seemed unthinkable around this time last year.Interestingly, these low yields should be encouraging governments to borrow more, too. I wrote last week that the bond markets were begging for infrastructure spending. However, it seems neither Germany nor the U.S. has any appetite for that sort of initiative. The German government is reportedly preparing fiscal stimulus that could be triggered by a deep recession, while President Donald Trump hasn’t ruled out a payroll tax cut to stave off any economic weakness.It’s certainly possible that U.S. yields will only fall further from here, and other companies can also borrow or refinance at rock-bottom interest rates. But the move in global bond markets in recent weeks could was extreme, to say the least. The weak demand for Germany’s 30-year bond auction on Wednesday, which offered a coupon of 0% at a yield of -0.11%, suggests there are at least some lines that investors won’t cross.For prudent companies, it was well worth delaying summer vacations to get their deals done.To contact the author of this story: Brian Chappatta at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Banking high on its strong Medicare business and strategic buyouts, Humana (HUM) shows potential to reap benefits for investors, partly offset by high costs.
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Humana Inc. New York, August 16, 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Humana Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
Investors are constantly looking for stocks that will hold up regardless of economic uncertainty. A good starting point is recent analyst activity. A ratings boost or a price target increase can give us a better sense as to whether a company has the potential to outperform the rest. Not to mention these changes can have an effect on share prices. For example, Salesforce.com (CRM) is up 2% after Compass Point initiated its coverage with a Buy on August 13.Here are 10 trending stocks based on recent analyst activity. McDonald's Corporation (MCD)The fast food giant just received good news from MKM Partners. Brett Levy, a three-star analyst according to TipRanks, initiated his coverage of MCD with a Buy and set a $250 price target. He thinks share prices could increase by 15% over the next twelve months. “We believe that strong domestic and international sales growth is sustainable for the restaurant chain,” Levy explained on August 12. The analyst has an impressive 71% success rate.MCD boasts a ‘Strong Buy’ analyst consensus and a $230 price target, suggesting 6% upside potential. D.R. Horton Inc. (DHI)D.R. Horton is one of the largest home construction companies in the U.S. On August 12, SunTrust Robinson’s Rohit Seth initiated coverage with a Buy rating and set a $56 price target, suggesting 19% upside potential. “We see the stock as a premier large-cap homebuilder offering attractive cash generation with superior position in the rapidly growing entry-level segment. We expect D.R. Horton to outperform in the second half of this year with orders and price mix as the homebuilding industry growth accelerates thanks to lower interest rates,” he noted. The four-star analyst has a 58% success rate and gets a 12% average return per rating. The Street is bullish on DHI. The stock has a ‘Strong Buy’ analyst consensus and a $52 average price target, implying 12% upside. Humana Inc. (HUM)The health insurance provider just received a ratings boost from Cantor Fitzgerald analyst Steven Halper after it posted strong second quarter earnings results. On August 12, the five-star analyst upgraded the rating to a Buy and set a $345 price target, implying 17% upside potential. He argues that the company's strong 2Q19 results were fueled by continued success in Medicare Advantage and cost management. "MA continues to grow at a nice clip, and HUM’s recent Louisiana Medicaid contract award demonstrates its success outside Medicare. Importantly, we believe the company’s investments in population health management and social determinants of health will accelerate growth over time,” Halper added.The rest of the Street is cautiously optimistic. HUM has a ‘Moderate Buy’ analyst consensus and a $326 average price target, suggesting 10% upside potential. Walt Disney Company (DIS)Some investors have expressed concern regarding Disney's earnings miss. However, Credit Suisse’s Douglas Mitchelson stated, “While Disney [stock] has outperformed the S&P 500 by 8% YTD, we see scope for further upside to Disney+ investor sentiment into its U.S. launch. We see a number of positive catalysts the next few quarters and believe downside risks to Disney estimates are now well understood by investors." On August 8, he upgraded DIS to a Buy and raised the price target from $130 to $150, indicating 11% upside potential. The five-star analyst has a 61% success rate and gets an average return of 15%. DIS has a ‘Strong Buy’ analyst consensus and a $157 average price target, indicating 16% upside potential. PayPal Holdings, Inc. (PYPL)Jeff Cantwell, a five-star analyst, believes that the online payment company’s valuation represents an improved opportunity for investors. On August 13, the Guggenheim analyst upgraded PYPL from a Sell to a Hold. “We note the recent pullback in PYPL’s shares, which has occurred against a backdrop of increasing macro uncertainty; shares have now fallen below our prior $104 PT. We believe the current level probably better reflects PYPL’s fair value; in that context, we see risk/reward as being more balanced,” he explained. Cantwell has a 74% success rate and an average return of 16% per rating. The Street is optimistic about this stock. PYPL has a ‘Strong Buy’ analyst consensus and a $131 average price target, suggesting 27% upside potential. Roku Inc. (ROKU)On August 12, Needham’s Laura Martin gave the streaming platform a vote of confidence. The five-star analyst, reiterated her Buy rating and raised the price target from $120 to $150, suggesting 12% upside potential. The price target hike sent shares surging 7%. “Roku is an arms dealer in the streaming video space, as its hardware facilitates multiple streaming platforms. Roku is therefore able to present a highly targeted proposition to advertisers, as each new Roku user is assigned a unique device ID and all content viewed can be extracted for superior targeting,” she said. Martin has a 63% success rate and gets an average return of 21% per rating. Roku has a ‘Moderate Buy’ analyst consensus and an average price target of $115, implying 14% downside. Zendesk (ZEN)Zendesk provides customer service software and support ticketing services. After a second quarter that produced strong growth, the company received a boost from Compass Point analyst Marshall Senk on August 13. The five-star analyst initiated coverage with a Buy and set a $100 price target. He thinks share prices could soar by as much as 34% over the next twelve months. Senk has a 77% success rate and gets an average return of 22% per rating. The Street is also bullish on ZEN. It has a ‘Strong Buy’ analyst consensus and a $102 average price target, implying 38% upside potential. Creditcorp Limited (BAP)Creditcorp is the largest financial services holding company in Peru. The company just received a positive signal from J.P. Morgan after its August 9 Q2 earnings release. Three-star analyst, Domingos Falavina, upgraded BAP to a Buy and raised the price target from $232 to $250. He believes the stock could surge by 24% over the next twelve months. Falavina has a 70% success rate and gets an average return of 9% per rating. BAP has a ‘Moderate Buy’ analyst consensus and a $250 average price target, suggesting 24% upside potential. William Lyon Homes, Inc. (WLH)The home construction company just got a ratings boost from Wedbush analyst Jay McCanless. The three-star analyst upgraded his rating from a Hold to a Buy and raised the price target from $20 to $21, indicating 23% upside potential. He notes that the recent pullback in shares has effectively discounted the reduction in his 2019 EPS estimates following the Q2 results. "Overall, we view the shares as undervalued at current levels,” McCanless added on August 13.WLH has a ‘Moderate Buy’ analyst consensus and a $21 average price target, implying 18% upside. New Relic Inc. (NEWR) Despite the slowdown reported in its first quarter earnings, one analyst is vouching for the software analytics company. Joseph Bonner, a five-star analyst, upgraded NEWR from a Hold to a Buy and set a $93 price target on August 13. He believes share prices could jump 47% over the next twelve months, arguing that the slowed growth is not a long-term trend. The Argus Research analyst has a 67% success rate and gets a 12% average return per rating. NEWR has a ‘Moderate Buy’ analyst consensus and a $95 price target, suggesting 50% upside potential. Discover the Analysts’ Top-Rated Stocks right now
Analysts at Cantor Fitzgerald upgraded the health insurance company Humana, praising the “continued success” of its Medicare Advantage plans.
Humana's larger strategic investments in 'population health management' and the 'social determinants of health' will boost growth over the long-term, Cantor Fitzgerald noted Monday as it upgraded its outlook on the health insurer's stock to overweight.
The contract to provide this southern state's Medicaid benefits could be more or less based on how many people Humana ends up covering. It beat out six other companies to get one of four contracts.
The study reviews five years of participant performance data in Humana's wellness rewards program Go365. It shows, in part, that participants were able to cut unhealthy days in half.
U.S. stocks dropped Thursday after President Donald Trump wrote in a Twitter post that the administration would be imposing 10% tariffs on $300 billion worth of Chinese imports at the beginning of September, following a round of trade talks earlier this week.
Humana stock surged early Wednesday after Humana earnings blew away second-quarter estimates on Medicare Advantage strength.
Humana topped analysts expectations in the second quarter by bringing nearly $2 billion more in revenue in the second quarter than it did last year.