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Centene (CNC) Announces Solid Financial Guidance for 2021

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Centene Corporation (CNC - Free Report) recently announced its 2021 financial outlook. Per the new guidance, total revenues are expected in the range of $114.1-$116.1 billion. Adjusted earnings per share for the next year are anticipated to be $5-$5.30. The Zacks Consensus Estimate for the same is pegged at $5.40 per share.

For fiscal 2021, the leading health insurer expects Health benefits ratio or HBR in the band of 86.6-87.2%. Notably, the selling, general and administrative (SG&A) expense ratio is estimated to be 8.8-9.3% whereas the adjusted SG & A expense ratio is estimated to be 8.6-9.1%. Effective tax rate for the upcoming year is estimated to be 24.7-26.7%. The guidance doesn’t consider buyouts that are yet to be closed. The company is expected to continue performing well as it heads into 2021.

Its 2021 revenue view compares favorably with 2020’s projection of $109.8-$111.4 billion. Following third-quarter results, the company also reaffirmed its 2020 adjusted earnings per share guidance in the range of $4.90-$5.06.

This health insurance giant is well-poised for growth on the back of its inorganic growth story and a healthy revenue stream.

The company boasts an impressive inorganic growth strategy for expanding its markets and increasing Medicaid membership. Its buyout of WellCare strengthens its position as the largest Medicaid managed care organization in the country with around 22 million members. The company’s top line is also benefiting from membership growth in the Health Insurance Marketplace business. Centene’s medical membership has been rising over the last several quarters, courtesy of contract wins and geographical expansion.

Shares of this currently Zacks Rank #4 (Sell) company have lost 6.7% in a year's time against the industry's growth of 3.3%.

However, some of its peers, namely Anthem, Inc. (ANTM - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) have gained 1.1%, 48% and 13.9% each in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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