BHG - Wolfe downgrades Centene to peer perform citing cost concerns

2023-07-12 14:29:10 ET

Wolfe Research lowered its rating of Centene ( NYSE: CNC ) to peer perform, citing concerns about higher commercial costs along with Medicare Advantage costs and ratings.

The research group said it was also lowering its earnings per share estimates for the managed care provider to below Street consensus for 2023 and 2024 to $5.99 and $6.02 from $6.33 and $6.50, respectively.

In addition to cost trends, Wolfe said it was also concerned about the impact of Medicaid redetermination, along with the "trajectory" for improving the company's Medicare Advantage star ratings.

Wolfe added that it expects the company to have an "emerging view" with its fiscal Q2 results of "risk pool changes driven by redeterminations and state trend assumptions built into rates."

Centene's fiscal Q2 earnings are expected to be released before market open on July 28, according to the company.

Centene was one of several managed care companies that saw t heir Medicare Advantage "star" ratings drop for 2023. Others included CVS ( CVS ), UnitedHealth ( UNH ) and Bright Health ( BHG ). Medicare Advantage star ratings for 2024 are expected to be released in October.

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