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Strength Seen in Centene (CNC): Can Its 5.9% Jump Turn into More Strength?

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Centene (CNC - Free Report) shares rallied 5.9% in the last trading session to close at $64.29. 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 2.9% gain over the past four weeks.

Centene Corporation extended its rally for the second straight day, driven by investor confidence in its strategic shift and the broader move toward defensive healthcare stocks. Recent trade tariffs sparked a market downturn, particularly affecting the tech and manufacturing sectors. Concerns over inflation and a potential recession drove investors toward stable sectors, such as managed care, boosting Centene’s stock.

The company’s rally also highlights growing optimism about its restructuring efforts and financial health. By streamlining operations and focusing on Medicaid, Medicare, and ACA plans, Centene has strengthened its core business. These strategic moves have likely further reassured investors about its long-term growth potential.

This healthcare company is expected to post quarterly earnings of $2.20 per share in its upcoming report, which represents a year-over-year change of -2.7%. Revenues are expected to be $43.47 billion, up 7.6% 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 3% 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. Humana (HUM - Free Report) , another stock in the same industry, closed the last trading session 0.1% lower at $265.48. HUM has returned 1.4% in the past month.

For Humana, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $9.95. This represents a change of +37.6% from what the company reported a year ago. Humana currently has a Zacks Rank of #3 (Hold).


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