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Here's What You Should Know From Centene's (CNC) 2023 Outlook
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Centene Corporation (CNC - Free Report) announced its 2023 outlook before an investor event. It also reiterated its 2022 guidance. While improving profitability was highlighted, the company stated its intention to boost the repurchase program.
Let’s delve deeper.
2022 Guidance Reaffirmed
The company expects revenues of $142.7-$144.7 billion, the mid-point of which indicates 14% growth from the 2021 reported figure. Adjusted EPS is projected to be $5.65-$5.75, the mid-point suggesting a 10.7% improvement from the 2021 reported figure. However, the mid-point is a bit lower than the Zacks Consensus Estimate of $5.71 per share.
2023 Outlook
Centene expects total revenues of $137.4-$139.4 billion, lower than the 2022 expected figure. The company estimates premium and service revenues of $129.5-$131.5 billion, lower than the $134-$136 billion guided range for 2022.
CNC’s 2023 adjusted EPS is estimated to be $6.25-$6.40, signaling a significant increase from 2022 estimates despite falling revenues. This highlights its improving operating efficiency and shows how the Value Creation Plan, launched in 2021, is benefiting the company. Divesting non-core operations like PANTHERx and Magellan Rx are playing major roles in its road to improving profitability. The mid-point of the 2023 range is higher than the Zacks Consensus Estimate of $6.29 per share.
Centene expects the health benefits ratio to be 87.2-87.8% in 2023, signaling an improvement from the 2022 estimate of 87.6-88%. The company also estimates the adjusted SG&A expense ratio to be 8.2-8.7%. It projects the adjusted effective tax rate to be 24.4-25.4%.
Diluted shares outstanding for 2023 are expected at 557.5-560.5 million. The board has authorized a new $2-billion fund for the share buyback program, which had around $950 million left.
Price Performance
Centene’s shares have gained 6.6% in the past six months compared with the industry’s 16.8% rise.
The Zacks Consensus Estimate for HealthEquity’s current-year earnings is pegged at $1.29 per share. HQY has witnessed two upward estimate revisions in the past 30 days against none in the opposite direction. It beat earnings estimates by 8.6% in the last quarter.
The Zacks Consensus Estimate for MedAvail Holdings’ current-year bottom line indicates a 37.3% improvement from the prior-year reported number. MDVL has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Progyny’s 2022 bottom line has increased 16.7% in the past 60 days. PGNY beat earnings estimates in the past four quarters, with an average surprise of 233.8%.
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Here's What You Should Know From Centene's (CNC) 2023 Outlook
Centene Corporation (CNC - Free Report) announced its 2023 outlook before an investor event. It also reiterated its 2022 guidance. While improving profitability was highlighted, the company stated its intention to boost the repurchase program.
Let’s delve deeper.
2022 Guidance Reaffirmed
The company expects revenues of $142.7-$144.7 billion, the mid-point of which indicates 14% growth from the 2021 reported figure. Adjusted EPS is projected to be $5.65-$5.75, the mid-point suggesting a 10.7% improvement from the 2021 reported figure. However, the mid-point is a bit lower than the Zacks Consensus Estimate of $5.71 per share.
2023 Outlook
Centene expects total revenues of $137.4-$139.4 billion, lower than the 2022 expected figure. The company estimates premium and service revenues of $129.5-$131.5 billion, lower than the $134-$136 billion guided range for 2022.
CNC’s 2023 adjusted EPS is estimated to be $6.25-$6.40, signaling a significant increase from 2022 estimates despite falling revenues. This highlights its improving operating efficiency and shows how the Value Creation Plan, launched in 2021, is benefiting the company. Divesting non-core operations like PANTHERx and Magellan Rx are playing major roles in its road to improving profitability. The mid-point of the 2023 range is higher than the Zacks Consensus Estimate of $6.29 per share.
Centene expects the health benefits ratio to be 87.2-87.8% in 2023, signaling an improvement from the 2022 estimate of 87.6-88%. The company also estimates the adjusted SG&A expense ratio to be 8.2-8.7%. It projects the adjusted effective tax rate to be 24.4-25.4%.
Diluted shares outstanding for 2023 are expected at 557.5-560.5 million. The board has authorized a new $2-billion fund for the share buyback program, which had around $950 million left.
Price Performance
Centene’s shares have gained 6.6% in the past six months compared with the industry’s 16.8% rise.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Centene currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are HealthEquity, Inc. (HQY - Free Report) , MedAvail Holdings, Inc. and Progyny, Inc. (PGNY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for HealthEquity’s current-year earnings is pegged at $1.29 per share. HQY has witnessed two upward estimate revisions in the past 30 days against none in the opposite direction. It beat earnings estimates by 8.6% in the last quarter.
The Zacks Consensus Estimate for MedAvail Holdings’ current-year bottom line indicates a 37.3% improvement from the prior-year reported number. MDVL has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Progyny’s 2022 bottom line has increased 16.7% in the past 60 days. PGNY beat earnings estimates in the past four quarters, with an average surprise of 233.8%.