J.P. Morgan analyst John Stansel downgraded the rating on Centene to a Hold today, setting a price target of $48.00.
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John Stansel has given his Hold rating due to a combination of factors impacting Centene’s financial outlook. The company has withdrawn its 2025 guidance, primarily due to higher-than-expected morbidity and slower growth in the ACA exchange market, as indicated by Wakely data. This has led to a significant revenue headwind, with an estimated $1.8 billion reduction in net risk adjustment revenue, translating to a $2.75 adverse impact on adjusted EPS for a substantial portion of Centene’s ACA Exchange book.
Furthermore, while Centene plans to adjust its pricing strategy in 2026 to counter these challenges, there remains uncertainty surrounding regulatory changes in the ACA Exchanges. This includes potential impacts from the expiration of ACA exchange eAPTC subsidies and changes in CMS’s marketplace integrity rules. As a result, Stansel’s Hold rating reflects a cautious stance, balancing the company’s long-term growth prospects with the immediate headwinds and uncertainties it faces.
According to TipRanks, Stansel is a 3-star analyst with an average return of 10.9% and a 66.67% success rate.
In another report released today, Barclays also maintained a Hold rating on the stock with a $45.00 price target.