Adding Humana to its portfolio could further complicate a company that continues to grapple with how to turn around its sluggish e-commerce sales and compete with Amazon.
Humana, then, “could serve as a distraction from the company’s push to improve its stores and grow its eComm offering,” UBS analyst Michael Lasser wrote in a client note obtained by Insider. “We believe [Walmart] could be better served by continuing to focus its efforts on improving its core business.”
Bringing on an insurer worth about $36.8 billion would force Walmart to don several hats: health insurer, pharmacy benefits manager, clinic, retail pharmacy, retailer and grocer.
Despite the potential diversion from its core operations, Mr. Lasser said Walmart stands to diversify its revenue stream and attract new customers to its healthcare business under a Humana deal. These benefits could lead to lower healthcare costs and greater consumer traffic. Mr. Lasser added a merger could keep competition from Amazon at bay.
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