Morgan Stanley Initiates Centene (CNC) with Overweight Rating, Sets $70 PT

Centene Corporation (NYSE:CNC) is one of the 8 Best Inexpensive Stocks to Buy Right Now. On June 9, Morgan Stanley initiated coverage on Centene with an Overweight rating and a price target of $70. Analyst Ricky Goldwasser noted that while varying permutations of policy headwinds are looming across Medicaid, this potential negative impact is disproportionately reflected in Centene’s current valuations.

Morgan Stanley expressed optimism regarding Centene’s strengthening Medicaid footprint and its potential for dual-eligible integration. The firm contended that policy risk, although a key variable, might prove more manageable than generally feared. In Q1 2025, the company’s revenue for the quarter was $46.62 billion, which marked a 15.4% year-on-year increase and an 8.3% beat against analyst estimates of $43.03 billion.

A doctor holding a clipboard in a hospital ward, discussing patient treatment plan with the nurses.

While the number of customers decreased to 27.94 million in Q1 from 28.6 million in the previous quarter, CEO Sarah London attributed the overall performance of Centene to improvements in Medicaid rates and recent contract wins in Illinois and Nevada. She also acknowledged that a more severe flu season increased costs in Medicaid, but these were largely offset by underlying margin improvements.

Centene Corporation (NYSE:CNC) is a healthcare enterprise that provides programs and services to under-insured and uninsured families, and commercial organizations in the US. The company operates through 4 segments: Medicaid, Medicare, Commercial, and Other.

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Disclosure: None. This article is originally published at Insider Monkey.