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Saint Louis, Missouri-based Centene Corporation (CNC), with a market cap of $37.6 billion, is a multinational healthcare company specializing in government-sponsored healthcare programs. It caters to the under-insured and uninsured populations through member-focused services. Through its diversified product portfolio and expanding reach, Centene consistently grows premium and service revenues profitably.
Shares of the healthcare company have lagged behind the broader market in the past year. While CNC has surged 12.4% over this time frame, the broader S&P 500 Index ($SPX) has rallied by 25.2%. In 2024, the stock has tumbled 5%, compared to SPX’s 10.4% return on a YTD basis.
Despite trailing the broader market, CNC stock surpassed the US Healthcare Providers Ishares ETF (IHF) over the past 52 weeks. The exchange-traded fund has soared 5.2%, lower than CNC’s return for the period.
Shares of Centene have been on a downward swing this week, given the macroeconomic uncertainties surrounding the insurance sector. Centene reported larger-than-expected claim receipts in April, with the trend of higher medical costs in Medicaid continuing into May.
CNC stock also tumbled after its industry peer, UnitedHealth Group (UNH), highlighted near-term disturbances related to Medicaid reimbursement rates due to enrollment hurdles.
For the current fiscal year, ending in December, analysts expect CNC’s EPS to grow 2.1% year over year to $6.82. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Centene stock has a consensus “Moderate Buy” rating overall. Out of 17 analysts covering the stock, nine recommend a "Strong Buy," and the remaining eight suggest a “Hold."
The consensus rating has been consistent over the past two months.
Following Centene's fiscal Q1 earnings report, Deutsche Bank raised Centene's price target to $82 from $81 and maintains a “Hold” rating on the shares. The new price target suggests the stock could rally as much as 16.3% from the current price levels.
The mean price target of $89.27 suggests a 26.6% premium to CNC’s current price levels. The Street-high target of $110 represents an upside potential of 56%.
On the date of publication, Kritika Sarmah 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.
