Centene (CNC) Stock Forecast & Price Target

Centene's positive outlook is supported by a substantial increase in its Medicaid Health Benefits Ratio (HBR), which improved to 93.4%, benefiting from a strong rate environment anticipated to contribute to future premium revenue growth. The company's membership in Medicare Advantage plans with ratings of 3.5 stars or higher rose to 60%, enhancing its competitive positioning within the Medicare market. Additionally, with average rate improvements in its 9/1 and 10/1 cohorts projected to be in the mid-5% range, Centene is poised for increased revenue and sustained profitability as it navigates through the evolving healthcare landscape.

Centene is facing a challenging outlook due to expected declines in key metrics, including a reduction in low-cost Silver positions from 55% in 2025 to 42% in 2026, which may negatively impact revenue stability. The company's pre-tax earnings guidance for FY25 includes a significant $2.4 billion impact from risk adjustment, reflecting concerns over potential losses as it anticipates a $1.8 billion to $2.75 billion underwriting gap in its risk projections. Additionally, worsening marketplace risk scores, pressures on Medicaid margins, and vulnerabilities in its Medicare Part D business further contribute to a cautious long-term financial outlook for Centene.