Humana is one of the nation's largest providers of Medicare Advantage plans, which are privately run versions of the government's Medicare program for the elderly and disabled. Gupte said Humana has improved the quality of its Medicare Advantage business, and enrollment growth in these plans will be helped by the aging baby boomer generation and by employers that are looking to drop health coverage for retired workers.

"We strongly believe Medicare Advantage is still an attractive growth story despite bearish sentiment engulfing it," the analyst wrote.

She noted that Medicare Advantage plans face funding cuts in the next couple years under the health care overhaul, which aims to expand health insurance coverage to millions of uninsured people. But Gupte said bonus payments for plans that have high quality ratings will take some of the edge off those cuts.

Gupte also noted that Humana also has a lot of excess cash on its balance sheet, which gives the insurer flexibility to return some back to shareholders. She rates the stock "outperform."

The insurer will report its fourth-quarter and 2012 results on Feb. 4.

Its shares finished at $66.91 on Wednesday. They have traded in a 52-week range of 59.92 to $96.46.