It's that time of year when Medicare Advantage insurers await a big announcement from the government: their eligibility for financial bonuses, known as star ratings.

Barclays estimates Humana is on track for a bump-and has upgraded the stock to Overweight from Neutral.

Barclays also lifted its price target for Humana shares to $515 from $407.

On Friday morning, Humana stock was up more than 8% to $411.93, outpacing the broader market, up 0.12%.

Medicare's bonus payments to insurers are meant to reward higher quality plans, drawing on dozens of measures that are translated to a 5-star rating system. Collectively the bonus payments are worth billions of dollars. This year the Medicare agency is expected to spend $13.4 billion on the bonus program, up from $12.7 billion in 2025, according to health policy research group KFF.

The stakes are high for Humana, after missing out on eligibility for certain bonus payments in 2026. Executives set their sights on recovering for bonus year 2028, based on the upcoming release of 2027 star ratings.

That ratings announcement is anticipated to come out around Oct. 8. Analysts see it as the next stock catalyst for insurers in the Medicare Advantage market.

Barclays is "increasingly constructive" on the view that Humana will be able to "flip several contracts to bonus status"-including a larger contract, H5216, which covers 2.4 million lives, or about one-third of Humana's total.

"This contract is the most critical component of the company's long-term 2028" earnings target, worth about $1.5 billion of EBIT, or earnings before interest and taxes, and $9 of earnings per share, wrote analyst Andrew Mok in a Friday client note.

Based on publicly available information at this stage, and Barclays own proprietary scoring framework, Mok sees a 75% probability that the H5216 is upgraded.

The insurer is entering the bonus year 2028 ratings cycle "in a much stronger position than it did a year ago," Mok wrote.