Centene Reports Strong Q4 Results; Shares Rally 6%

Shares of Centene Corporation (NYSE: CNC) rallied 6% after the company reported better-than-expected results for the fourth quarter of 2021. The diversified healthcare company engages in providing programs and services to government-sponsored healthcare programs. 

Adjusted earnings came in at $1.01 per share, up significantly from $0.46 in the same quarter last year. Also, the figure surpassed analysts’ estimates of $0.98 per share. Revenues rose 15% to $32.6 billion and came above analysts’ expectations of $32.5 billion.

Premium and service revenue grew 15% year-over-year. Also, Centene reported health benefits ratio (HBR) of 87.9%, compared to 88.4% in the same quarter last year.

For 2021, the company reported net sales of $126 billion, up 13%. Also, adjusted EPS came in at $5.15, compared to $5 last year.

The Chairman and CEO of Centene, Michael F. Neidorff, said “Our portfolio is performing well as we executed across our three major product lines, building on our strong foundation and extending our market-leading position in government sponsored healthcare. As we look ahead, we are focused on advancing initiatives across the enterprise to deliver on our value creation goals and 2022 operational objectives.”

Outlook

For 2022, revenue growth is anticipated to be in the range of $135.9 billion to $137.9 billion, while adjusted earnings are expected to be between $5.30 and $5.50.

Also, premium and service revenue is expected to be between $129.8 billion to $131.8 billion. HBR is projected to be in the range of 87.6% to 88.2%.

Stock Rating

Following the release, Seaport Global Securities analyst Joseph D. France maintained a Buy rating on Centene and raised the price target to $105 from $100. The new price target implies 22.6% upside potential from current levels.

The Street is bullish on the stock and has a Strong Buy consensus rating based on 14 Buys and 3 Holds. The Centene stock price prediction of $93.24 implies 8.8% upside potential to current levels.

News Sentiment

News Sentiment for Centene is Very Positive based on 22 articles over the past seven days. All the articles have Bullish sentiment, compared to a sector average of 60%, and none have Bearish Sentiment, compared to a sector average of 40%.

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