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Centene Corporation (CNC), headquartered in Saint Louis, Missouri, is a healthcare enterprise that provides fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Valued at $36.10 billion by market cap, the company offers affordable and high-quality products to nearly one in 15 individuals across the U.S., including Medicaid and Medicare members and individuals and families served by the Health Insurance Marketplace, the TRICARE program, and individuals in correctional facilities.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CNC perfectly fits that description, signifying its substantial size, stability, and dominance in its industry.
The leading healthcare products and services provider has fallen 16.8% from its 52-week high of $81.42, which it hit on Feb. 26. Shares of CNC are down 12.7% over the past three months, underperforming the broader Healthcare ETF Vanguard’s (VHT) marginal gains over the same time frame.
Longer term, CNC shares have risen 2.1% over the past year, and in 2024, the stock is down 8.8%. By contrast, the VHT is up 6.8% on a YTD basis and 10.2% over the past 52 weeks.
The stock has been trading below its 50-day and 200-day moving averages since late May to confirm the bearish price trend.
On May 30, CNC shares were down more than 2% after the company said its early read of May claims receipts indicated continued medical costs higher than expected in Medicaid.
On May 29, CNC shares closed down more than 3% after its industry peer, UnitedHealth Group (UNH), said it sees a “disturbance” related to Medicaid reimbursement rates. With the end of the pandemic, states have cut Medicaid beneficiary rolls over the past year.
On Apr. 26, CNC reported its Q1 results. Its adjusted EPS was $2.26, beating the consensus estimate of $2.09. The company’s revenue of $40.41 billion surpassed the Street estimates of $36.41 billion. For the full year, CNC expects earnings to be $6.80 and revenue between $147.50 billion and $150.50 billion. The stock closed down more than 2% on the day the results were released and has been on a downtrend since then.
Rival Humana Inc. (HUM) has underperformed CNC. HUM stock has declined 19.1% in the past 52 weeks and is down 21.1% on a YTD basis.
Despite its recent underperformance compared to other healthcare stocks, analysts are optimistic about CNC’s prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering it, and the mean price target of $88.06 is a 30% premium to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
