Humana Reports Earnings Wednesday. The Medicare Advantage Headache Persists.

Humana shares are down 43% over the past 12 months, and 9.2% this year. The company’s worsening fortunes have been a bellwether for the industry. (Dreamstime)

Investors will be looking for signs that Humana’s earnings slide is nearing its bottom when the company reports second-quarter results on Wednesday morning.

Humana shares are down around 50% since the start of 2024, as investors have grown increasingly wary of Medicare Advantage, the government-funded, privately-managed health plans for U.S. seniors in which the company specializes.

Humana’s worsening fortunes have been a bellwether for the industry. A more-or-less pure play on Medicare Advantage, Humana has struggled with rising medical costs and regulatory issues that have served as warnings for larger players such as UnitedHealth Group , which fell on softer-than-expected guidance on Tuesday.

Humana shares are down 43% over the past 12 months, and 9.2% this year. In addition to the medical-cost troubles that have hit the entire industry, Humana suffered a major blow late last year after the Centers for Medicare and Medicaid Services cut the quality rating of its largest Medicare Advantage plan, which will weigh on the bonuses the company will receive from the federal government next year.

Humana lost a legal challenge to the rating cut in July, but it has since sued again.

Amid the turmoil, earnings expectations have plunged for this year and next year. Analysts expect Humana to earn $13.76 per share in 2026, down from $26.09 in 2023. Those estimates have fallen sharply: The FactSet consensus estimate for Humana’s 2026 earnings was $42.31 per share in late 2023.

For the second quarter of 2025, analysts are expecting Humana to report earnings of $5.92 per share on sales of $31.9 billion. They anticipate a medical-cost ratio—a closely-tracked metric that calculates the proportion of premiums paid out to cover medical costs—of 89.9%.

At an investor day in the spring, the company said that its sights are fixed on 2028, by which time it expects “significant earnings growth.”

For the full 2025 fiscal year, the company has said it expects earnings of approximately $16.25 per share and a medical-cost ratio of between 90.1% and 90.5%.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com