What Happened?
Shares of health coverage company Centene (NYSE: CNC) fell 5.4% in the afternoon session after Barclays significantly lowered its price target on the stock.
Barclays analyst Andrew Mok cut the price target by over 26%, from $45.00 down to $33.00, while maintaining an "Equal-Weight" rating. This negative analyst action comes as the company faces ongoing scrutiny. The market's pessimism is rooted in Centene's abrupt withdrawal of its 2025 guidance on July 1, 2025. The company pulled its forecast after an independent report revealed that market growth was lower and morbidity—a term for the rate of disease—was significantly higher than expected in many of the states it serves. That news previously caused the stock to plummet over 40% in a single day, and the latest price target reduction from Barclays suggests continued concern about the company's financial outlook.
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What Is The Market Telling Us
Centene’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 3.3% on the news that regulators lifted an enrollment suspension on one of its Medicare Advantage contracts for the upcoming sign-up season. The contract, Wellcare of Missouri, was previously barred from enrolling new members because the Centers for Medicare and Medicaid Services (CMS) determined it had charged excessive premiums and failed to spend at least 85% of premiums on patient care, a metric known as the medical loss ratio. The lifting of this suspension ahead of the upcoming sign-up season is a significant positive development for the health insurer, allowing it to resume membership growth in that specific plan. This news appeared to outweigh other reports of securities class action lawsuits being filed against the company.
Centene is down 52.7% since the beginning of the year, and at $28.62 per share, it is trading 62.6% 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 $479.55.
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