Humana Inc. HUM is forming a joint venture with funds and accounts managed by HPS Investment Partners, part of BlackRock, to own nearly 150 CenterWell Senior Primary Care clinics. BlackRock will acquire Welsh, Carson, Anderson & Stowe’s (“WCAS”) existing equity stake, valued at approximately $2.8 billion, and hold majority ownership. CenterWell will retain minority ownership and continue managing and operating the clinics.
The new venture is expected to deploy additional capital over the next two years to support existing operations, open new clinics and pursue strategic acquisitions. The arrangement will also eliminate existing put options, which Humana expects to significantly reduce related balance sheet liabilities, with BlackRock receiving certain protections. Greater financial flexibility and a lower cost of capital could help Humana fund growth more efficiently. The transaction is expected to close in the fourth quarter of 2026, without materially affecting 2026 adjusted earnings guidance of at least $9 per share.
The partnership could accelerate CenterWell’s expansion of senior-focused, value-based primary care. A broader clinic network may improve care coordination, support chronic disease management and help reduce avoidable hospital visits. BlackRock’s capital resources could enable expansion without requiring Humana to fund the entire investment independently. However, returns will depend on patient volumes, staffing costs and the ability of new locations to achieve sustainable profitability.
Looking ahead, CenterWell will have the option to purchase clinics from the joint venture beginning in 2028. This gives Humana flexibility to increase ownership as the business matures. If any remain by the end of 2033, BlackRock can initiate a sale process, with CenterWell retaining the right to make the first offer.
If executed well, the partnership could strengthen Humana’s healthcare-services strategy by supporting capital-efficient expansion, improving clinic-level profitability and generating sustainable long-term returns.
HUM’s Price Performance
Over the past year, HUM’s shares have surged 60.3% compared with the industry’s growth of 10.4%.
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HUM’s Zacks Rank & Key Picks
HUM currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space are Phibro Animal Health Corporation PAHC, Corcept Therapeutics Incorporated CORT and TG Therapeutics, Inc. TGTX, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Phibro Animal Health’s current-year earnings is pegged at $3.50 per share, suggesting 8.7% year-over-year growth. PAHC beat earnings estimates in each of the trailing four quarters, with the average surprise being 18.4%. The consensus estimate for current-year revenues is pegged at $1.6 billion, suggesting 3.8% year-over-year growth.
The Zacks Consensus Estimate for Corcept Therapeutics’ current-year earnings of $1.86 per share has remained stable over the past seven days. CORT beat earnings estimates in one of the trailing four quarters, met once and missed twice. The consensus estimate for current-year revenues is pegged at $1.1 billion, suggesting 50.3% year-over-year growth.
The Zacks Consensus Estimate for TG Therapeutics’ current-year earnings of 94 cents per share has witnessed one upward revision in the past seven days, against no movement in the opposite direction. The consensus estimate for TGTX’s current-quarter revenues is pegged at $965.2 million, suggesting 56.6% year-over-year growth.
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Humana Inc. (HUM): Free Stock Analysis Report
Corcept Therapeutics Incorporated (CORT): Free Stock Analysis Report
TG Therapeutics, Inc. (TGTX): Free Stock Analysis Report
Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).