Centene Provides Outlook for 2022; Shares Jump

Multinational healthcare firm Centene Corp. (CNC) has issued guidance for 2022 and provided details of its Value Creation Plan.

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Based in Missouri, the company serves as an intermediary for government-sponsored and privately-insured healthcare programs.

Following the announcement, the company’s shares closed 4.8% up on Friday. They gained another 1.1% in after-hours trading to end the day at $79.30.

2022 Guidance

For 2022, Centene expects total revenues in the range of $135.9 billion to $137.9 billion, versus the Street’s estimate of $133.05 billion.

Adjusted earnings per share (EPS) is anticipated to lie between $5.30 and $5.50, with the consensus estimate standing at $5.38.

2021 Guidance

Meanwhile, the company has reiterated its 2021 guidance and expects total revenues and adjusted EPS to range from $125.2 billion to $126.4 billion and $5.05 to $5.15, respectively.

Analysts expect the healthcare provider to report revenues of $126.24 billion and adjusted EPS of $5.11. (See Insiders’ Hot Stocks on TipRanks)

Value Creation Plan

Under the Value Creation Plan, the company will focus on strategic capital allocation, gross margin improvement, and SG&A savings. It will also review its non-core assets and evaluate strategic alternatives for its international business.

As a result of the plan, Centene expects adjusted EPS in the range of $7.50 to $7.75 for 2024.

Wall Street’s Take

Recently, Cowen & Co. (COWN) analyst Gary Taylor maintained a Buy rating on the stock with a price target of $85 (8.4% upside potential).

The analyst said, “CNC is our Best Idea for 2022. We believe the market is undervaluing the opportunity for margin expansion and share repurchase over the next three years. In addition, activist interest in the stock suggests that well-known healthcare executives could be added to the Board of Directors. We believe CNC’s P/E multiple will expand as the market gains confidence in this new trajectory.”

Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 3 Holds. The average Centene price target of $81.50 implies nearly 4% upside potential. Shares have gained 31.3% over the past year.

Smart Score

According to TipRanks’ Smart Score rating system, Centene scores a 9 out of 10, suggesting that the stock is likely to outperform market averages.