Humana, Chipotle, Roku: Trending Tickers
Chipotle (CMG) was upgraded to Outperform from Market Perform by BMO Capital Markets analysts, citing a pickup in sales and profit in the second half of the yer.
JPMorgan analysts are bullish on Roku (ROKU) ahead of the company's earnings report.
To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here.
Now let's get to some of today's trending tickers. We're watching Humana, Chipotle, and Roku. And our senior market reporter, Ali Canal, is still with us live from the Nasdaq. First up, let's get to Humana. It's falling after losing a lawsuit over Medicare payments. It's going to cost the company. The health insurer sued to try to undo cuts to its Medicare bonus payments, hoping to restore billions of dollars in revenue. The government had lowered Humana's quality rating, which means the company gets less money for Medicaid, starting in 2026. A Texas court voted to dismiss the case. Down 2% here is what we're seeing for Humana shares. And Ali, we've also seen some pressure on other companies within this industry.
Yeah, if you take a look at some of those competitors in the space, Elevance Health, Molina Health, they are also under pressure today. At last check, I believe they're both down around 5%. Now, Humana, like you said, is down over 2%. We are a little bit higher than some of those session lows here. But the decision has been a setback in what was a really high stakes legal case, one that could have added billions to Humana's bottom line, like you mentioned, Julie. And digging into this, it was interesting because the challenge was this downgrade to its Medicare quality ratings. Now, this would have reduced the number of members in bonus-eligible plans. And that's a big deal because these star ratings, they help determine how much money insurers receive in bonuses. And for Humana, that's core to their business. In 2024 alone, they took in 2.5 billion from these payments. And according to Barclays, a win could have added nearly double to Humana's 2026 profit outlook. But the judge ultimately ruled that this case was premature, suggesting that the company needs to complete the administrative appeals process first. But just really underscores the broader challenges here facing some of these government-backed insurance programs.
Yeah, definitely. And we could so we could see that process continue by the way legally, so this this story might not be over. Uh, coming up next, let's talk about Chipotle. It's getting an upgrade to outperform from market perform at BMO Capital Markets. The analyst there saying the restaurant chain's sales and profit should pick up in the second half of the year and that the U.S. expansion still has lots of room to grow. The firm setting a $65 price target, implying 21% upside for the shares. The shares, Ali, not getting that much of a lift from this call.
Yeah, we're just up around 4/10 of a percent, and it's really the second half that BMO is focused on. They pointed to accelerated same-store sales, improving margins. Uh, the analyst noted that comps are starting to pick up and says that Chipotle's U.S. heavy growth strategy could eventually hit a 10% annual pace. Now, what's was interesting in this note is they also said Chipotle's well-positioned even if the economy slows. And we've been talking about the state of the consumer, and there seems to be two different camps here: the high-income consumer and those that are still struggling with inflation. And that's hit a lot of those consumer-facing names, a lot of these fast food chains. Chipotle shares, by the way, they're down about 11% since the start of the year. And I'm used to talking about how bullish people are about Chipotle. So, we've definitely seen a slowdown on that front. But BMO is saying that its value proposition is best in class, which could help the brand continue to outperform peers on traffic along with revenue. So perhaps this call is a turning point for this company, but like you were saying, we're not seeing too much of a share react to it right now.
No, not at the moment. Um, and finally, let's get to another analyst call. JP Morgan bullish on Roku heading into earnings. The firm says advertising's holding up, China tariffs are cooling off, both of which are positive for the company. So, the analyst sees about 10% upside from the stock's last close. This one, um, kind of your bread and butter as somebody who who has covered media here, Ali. Um, and it's a stock that has had an interesting trajectory.
Interesting trajectory, especially within this market environment. If you take a look at a year-to-date chart, you'll see right around March and April where a lot of economists were coming out calling for recessions, Roku took a very serious hit. And that's because during any economic slowdown, what's first to go? It's those ad budgets, and that is really core to Roku's business. So, we saw the stock take a hit there. But now, we're up over 20%. And a big reason why is we had a lot of that uncertainty evaporate just a bit from this market. Uh uh, their economy right now seems to be really solid. A recession is not the base case at this point. And JP Morgan is expecting, heading into this earning season, that Roku is going to be in a strong position. They said that they were too conservative last quarter, and they now see platform revenue rising 15% in Q2. That's above current guidance. Full year EBITDA also expected to come in slightly ahead of forecast there. So, we'll see if this name can deliver. But a lot of the gains that we're seeing now since the start of the year, that that's stemming from that recovery from those April lows.
Ali, thanks so much. Appreciate it. And you can scan the QR code below to track the best and worst performing stocks with Yahoo Finances' Trending Tickers page.
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