US Health Insurer Stocks Decline as Molina Healthcare Projects Annual Profit Below Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Should l Buy CNC?
Source: moomoo
Health Insurers' Profit Decline: U.S. health insurers are experiencing a significant drop in profits, falling below annual profit estimates.
Impact of Molina Healthcare: The decline in profits is particularly influenced by Molina Healthcare's performance and forecasts in the health care sector.
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Analyst Views on CNC
Wall Street analysts forecast CNC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CNC is 43.07 USD with a low forecast of 32.00 USD and a high forecast of 59.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
5 Buy
8 Hold
2 Sell
Hold
Current: 39.920
Low
32.00
Averages
43.07
High
59.00
Current: 39.920
Low
32.00
Averages
43.07
High
59.00
About CNC
Centene Corporation is a healthcare company. The Company provides fully integrated services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Its segments include Medicaid, Medicare, Commercial and Other. Specifically, the Medicaid segment includes the Temporary Assistance for Needy Families (TANF) program, Medicaid Expansion programs, the Aged, Blind or Disabled (ABD) program, the Children's Health Insurance Program (CHIP), Long-Term Services and Supports (LTSS), Foster Care, Medicare-Medicaid Plans (MMP), which cover beneficiaries who are dually eligible for Medicaid and Medicare and other state-based programs. The Medicare segment includes Medicare Advantage, Medicare Supplement, Dual Eligible Special Needs Plans and Medicare Prescription Drug Plans. The Commercial segment includes the Health Insurance Marketplace product along with individual, small group, and large group commercial health insurance products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Sales Surge: The company's revenue soared from $40.81 billion to $49.73 billion, exceeding the consensus estimate of $48.39 billion, reflecting strong demand in the healthcare insurance market and successful business expansion.
- Health Benefits Ratio Shift: The health benefits ratio (HBR) increased to 94.3%, up from 89.6% last year, primarily driven by higher morbidity in the Marketplace and changes due to the Inflation Reduction Act, highlighting rising medical costs.
- Membership Decline: Total membership across Centene's portfolio fell from 28.60 million to 27.63 million, largely due to a drop in Medicaid membership to 12.52 million, despite an increase in commercial membership from 4.81 million to 5.99 million, indicating shifts in market dynamics.
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See More
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- Amazon Investment Concerns: Amazon's announcement of a $200 billion investment in data centers, chips, and other equipment led to a more than 9% drop in its stock, raising doubts about the long-term returns of its AI investments and potentially impacting future investor confidence.
- Earnings Season Insights: With 79% of S&P 500 companies exceeding expectations and Q4 earnings projected to grow by 8.4%, this indicates strong corporate profitability, which may provide ongoing support for the market despite economic uncertainties.
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- Financial Performance Overview: Centene reported a Q4 2025 adjusted diluted loss per share of $1.19 and a full-year adjusted EPS of $2.08, indicating slight outperformance against expectations despite challenges, showcasing management's execution capabilities and market adaptability.
- Optimistic 2026 Outlook: The company projects full-year 2026 adjusted EPS to exceed $3, representing over 40% year-over-year growth, marking a significant recovery in the enterprise's earnings power, particularly in Medicaid and Marketplace stability.
- Cost Control Strategies: Centene employs a multipronged, data-driven approach to manage Medicaid costs, including network optimization and clinical program enhancements, aimed at improving service quality and reducing operational costs, thereby enhancing overall profitability.
- Market Dynamics and Challenges: While Marketplace trends were slightly better than expected, increased accruals related to CMS reconciliation and NSA disputes necessitate aggressive actions to protect the system from fraudulent activities, ensuring future profitability.
See More
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