Wall Street Lunch: Humana Shares Hit Hard

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Members in top-rated Medicare plans for 2025 drop sharply. (0:16) Joby Aviation surges on Toyota investment. (2:08) Tesla deliveries fall short. (4:05)
The following is an abridged transcript:
Our top story so far
Humana (NYSE:HUM) is plunging after the health insurer disclosed a sharp reduction in members enrolled in its Medicare Advantage (MA) plans rated four stars and above.
Citing preliminary 2025 MA Star Ratings data, Humana said that the members enrolled in its plans rated four stars and above reached roughly 1.6 million for 2025, or 25% of all members, down from ~94% enrollment for 2024.
As part of the Star Ratings system, the Centers for Medicare and Medicaid Services rewards plans with four or more stars with annual bonus payments. Plans with higher ratings can receive higher bonuses in the following calendar year.
But Humana contested the data, noting that there may be errors in the CMS’ calculation.
In a filing the company says “there may be potential errors in CMS’ calculation of certain of its results and industry threshold cut points,” noting it will continue to engage with CMS to ensure the numbers are accurate and reflect the plans’ quality.
“Humana is exploring all available options to mitigate the expected 2026 revenue headwind related to its 2025 Star ratings in the event its challenges to the results are unsuccessful,” the company said, adding there is a risk to achieve an MA margin target of at least 3% by 2027.
But the 2025 Stars results are not expected to impact HUM’s financial results or outlook for 2024 or 2025.
Among other active stocks today, Barclays analyst George Wang sees little upside for Super Micro Computer (SMCI) near term, as he adjusted his price target for the company’s 10-for-1 stock split.
Wang, who has an Equal Weight rating on the stock, set his price target at $42, just about $0.50 above currently levels. He says the target multiple is unchanged and reflects near-term margin headwinds from competitive pricing, uncertainty around internal controls, the 10K filing delay and lack of visibility on GB200 orders.
Shares of startup Joby Aviation (JOBY) surged thanks to another $500 million from Toyota (TM). The investment will enable Joby to expand its commercialization of an electric air taxi and bring Toyota’s total investment to $894 million. The investment will be made in the form of cash for common stock.
And Salesforce (CRM) caught an upgrade by Northland Capital to Outperform from Market Perform, due in part to positive customer feedback on Agentforce, the company’s latest AI-powered offering.
The firm boosted its 12-month price target to $400 from $270 as the company’s “GenAI initiatives come to fruition with the announcement of Agentforce, providing greater confidence in sustained mid-teen revenue growth.”
In today’s trading, bulls are battling to keep stocks in the green after a decline at the opening bell. The S&P 500 (SP500) took out the lows of Tuesday briefly but then saw buyers move in as oil moved off highs.
Mary Ann Bartels, chief investment strategist at Sanctuary Wealth, says