What Happened?
Shares of health coverage company Centene (NYSE: CNC) jumped 11.8% in the morning session after the company reaffirmed its optimistic 2025 earnings outlook and shared positive early data on its Medicare quality ratings.
The health insurer maintained its projection of approximately $1.75 in adjusted diluted earnings per share for 2025, which is significantly above the consensus analyst forecast of $1.64. Adding to the positive news, CEO Sarah London said at a conference that preliminary data for its Medicare quality scores, known as star ratings, were in line with expectations. The update also showed a slightly higher percentage of members in four-star plans, which are eligible for bonus payments. The company stated that its financial results through August were consistent with its full-year guidance, citing positive Medicaid results for July and August. Following the news, Barclays reiterated its Equalweight rating on the stock.
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What Is The Market Telling Us
Centene’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Centene and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 6.8% on the news that peer UnitedHealth affirmed its 2025 earnings outlook, which lifted sentiment for the entire health insurance sector. UnitedHealth, a major player in the industry, simply reiterated the same full-year guidance it provided six weeks ago, but this was enough to spark a rally among health insurers. The stability signaled by the industry leader boosted investor confidence in related companies, with Centene's stock climbing alongside peers. Adding to the positive sentiment for Centene, the percentage of its shares sold short has recently declined. The company's short percent of float has fallen by 14.81%, indicating that fewer traders are betting against the stock.
Centene is down 42.9% since the beginning of the year, and at $34.54 per share, it is trading 54.9% below its 52-week high of $76.57 from September 2024. Investors who bought $1,000 worth of Centene’s shares 5 years ago would now be looking at an investment worth $612.06.
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