Humana's Price Target Raised By Citigroup To $71

Citigroup has published a research report on Humana International HAR after the company hit a 52-week high last week during its 4Q. In the report, Citigroup writes "While there's no way to fix Humana's long-term care business, the company's core business performed extremely well in the fourth quarter, driven by lower cost trends. Since Humana's 2011 Medicare bids were submitted last June and there is no minimum Medicare MLR in 2011, we think much of the fourth quarter upside will carry over into 2011. We're raising estimates (ahead of company guidance) and our price target. It seems clear that Humana's 5% Medicare margin assumption is too low for 2011, but the company is also being conservative on membership. Humana added 130,000 net new Medicare members in January, but guidance assumes growth of only 100,000 lives for the year." Citigroup maintains its Buy rating and has raised the price target from $65 to $71. Humana International closed yesterday at $49.12.