Bob, HUM 15% growth for 2005 is aggresive.
I posted this earlier in MDF board.
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Bob, HUM 15% (Medicare Advantage business)internal growth projection for 2005 is very aggresive IMO. I think somewhere along the yaer they might revise it downwards IMO. not saying that it's not possible to hit 15% internal growth rate but I really think it's a long shot for them.
Ask around (Mr. Earley, other experts etc) and see if they have similar view with me. I'm leaning towards 7-10%, and probably 12% tops for HUM.
However I do agree with your point that any incremental revenue that MDF get, bigger and bigger portion of that incremental revenue will flow to the bottom line. If MDF top line will grow 15% in 2005 then I will be pleasantly surprised. I expect at least 7% top line growth and probably 10-15% bottom line growth in 2005.
Do you think HUM growth rate has direct correlaton with MDF growth rate (the Medicare Advantage portion)? and if the increase will be proportional (or bigger for MDF as HUM might give MDF more portion of their growth)?
What do you think about the news below, questioning Humana Medicare Advantage business?
Do you think MDF will bear similar (increased) risk claimed by the analysts?
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Banc of America Securities lowered the target price on Humana (nyse: HUM - news - people ), "saying risk associated with the Medicare Advantage (MA) business may be a little higher than we initially expected." Banc of America, which rates the company at "buy," still believes "Humana's traditional HMO business is well positioned, but its MA expansion opportunities may not be as robust." The research firm kept its earnings-per-share estimates at $2.20 in 2005 and $2.55 in 2006. Humana currently trades at 12.5 times the 2006 EPS estimate, a discount of roughly 15% to the managed care sector, the firm noted. But Banc of America said Humana shares should trade in line with its peers, given the improved commercial book of business, which shed several unprofitable accounts. The firm cut Humana's 12-month price target to $35 from $38, the new target assuming the shares trade at 15.9 times and 13.7 times the respective 2005 and 2006 EPS estimates of $2.20 and $2.55 per share. Banc of America's top picks in its managed care coverage are Humana and Aetna (nyse: AET - news - people ), which is rated at "buy" with a $85 price target. The firm's least favorite is Coventry Health Care (nyse: CVH - news - people ), rated at "sell" with a $38 price target.
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Stan
Patiently waiting for the 2004 10K and Q4 10Q. All the best for all of you....
