What Happened?
Shares of health coverage company Centene (NYSE: CNC) jumped 6.8% in the afternoon session after 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.
The shares closed the day at $31.10, up 7.8% from previous close.
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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 5 days ago when the stock dropped 5.4% on the news that 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.
Centene is down 48.7% since the beginning of the year, and at $31.04 per share, it is trading 59.5% 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 $541.24.
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