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Centene (CNC) Stock Jumps 6%: Will It Continue to Soar?

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Centene (CNC - Free Report) shares rallied 6% in the last trading session to close at $80.86. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 11.3% loss over the past four weeks.

Centene stock witnessed a price rise, which might be the result of an upgrade received from the well-renowned financial services provider Credit Suisse. The move followed management’s announcement of increasing the outlook for adjusted earnings per share (EPS) coupled with premium and service revenues for 2022.

Per the updated guidance issued, adjusted EPS is expected within $5.55-$5.70, up from the previous outlook of $5.40-$5.55. Meanwhile, premium and service revenues for 2022 are forecasted between $134.3 billion and $136.3 billion, up from the prior projection of $132.3-$134.3 billion. Concurrent with releasing an improved 2022 guidance, management also increased the capacity of Centene’s existing share repurchase program by $3 billion.

This healthcare company is expected to post quarterly earnings of $1.52 per share in its upcoming report, which represents a year-over-year change of +21.6%. Revenues are expected to be $35.34 billion, up 13.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Centene, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CNC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Centene is part of the Zacks Medical - HMOs industry. UnitedHealth Group (UNH - Free Report) , another stock in the same industry, closed the last trading session 6.3% higher at $480.32. UNH has returned -8.1% in the past month.

UnitedHealth's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $5.25. Compared to the company's year-ago EPS, this represents a change of +11.7%. UnitedHealth currently boasts a Zacks Rank of #2 (Buy).


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