Centene Corporation’s Profits Heavily In Healthcare On Their Second Quarter Profits

Centene Corporation is a diversified healthcare company that primarily engages in providing programs and services to the government sponsored healthcare programs. The company is also engaged in providing education and outreach programs to assist members in accessing quality and appropriate healthcare services.

“Centene $CNC was stupid cheap in late ’19. Since, we’ve had: lots of healthcare reform tough talk and posturing a global pandemic, epic rise and fall of the Teladoc(s), record inflation/ recession start American healthcare still sucks. Stock is at all-time highs,” said STL Biotech in a tweet.

Barclays analyst Steven Valiquette maintained a Buy rating on Centene on July 28 and set a price target of $85.00. The company’s shares closed last Friday at $66.18. “$CNC Centene, a managed care company, is trading at 12x forward earnings. An EV/EBIT of 10.8 and is growing revenues at >20% y/y. Very little net debt. About 12% ROE. I think it is a great bet on the status quo. (1/2),” said Biotech.

According to TipRanks, Valiquette is a 2-star analyst with an average return of 0.2% and a 53.39% success rate. Valiquette covers the Healthcare sector, focusing on stocks such as Cardinal Health, HCA Healthcare, and Amedisys. Centene has an analyst consensus of Moderate Buy, with a price target consensus of $86.00, implying a 29.95% upside from current levels. In a report released on July 14, Morgan Stanley also maintained a Buy rating on the stock with a $94.00 price target.

Based on Centene’s latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of $33.71 billion and a net profit of $1.06 billion. In comparison, last year the company earned a revenue of $37.19 billion and had a net profit of $849 million

Healthcare company Centene Corporation’s (NYSE: CNC) second-quarter (Q2) profits for 2023 grew to $1 billion due to increased enrollment. The company reported an adjusted EPS of $2.10, up from $1.77 a year ago, beating the consensus of $2.05. Overall sales increased to $37.61 billion from $35.94 billion, beating the consensus of $36.04 billion.

The premium and service revenues increased by 3% to $34.8 billion, driven by membership growth in the Marketplace business due to strong product positioning, open enrollment results, and overall market and Medicaid growth. A health benefits ratio of 87% for Q2 2023 represents an increase from 86.7% in the comparable period in 2022. “Total managed care membership increased to 28.41 million, compared to 26.43 million at the end of Q2.  Centene’s enrollment in the “commercial marketplace” business to nearly 3.3 million members from 2 million a year ago,” said Centene reports.

Centene raised its full-year earnings forecast to at least $6.45 per share from at least $6.40 compared to the consensus of $6.46. The company increased its 2023 premium and services revenue forecast range by $1.8 billion to reflect an additional $1 billion of Medicaid and Commercial premiums and $800 million for Medicaid state-directed payments. The company expects FY23 sales of $147.3 billion-$149.3 billion versus $144.5 billion-$146.5 billion expected earlier and the consensus of $146.5 billion. CNC shares are down 0.64% at $69.50 during the premarket session on the last check Friday.

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Edited by Eunice Anyango Oyule and Judy J. Rotich