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Healthcare Hit Again: Molina Cuts Guidance, Echoing Centene and UNH

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Key Takeaways

  • MOH cut its 2025 EPS forecast to $21.50-$22.50, down 10.2% at mid-point from previous guidance.
  • Molina flagged elevated medical costs across all segments as the driver behind its revised outlook.
  • MOH shares have fallen 31.6% in 3 months, while the industry dropped 38.9% amid broader sector turmoil.

Molina Healthcare, Inc. (MOH - Free Report) became the latest health insurer to slash guidance and sound the alarm over rising medical costs and unpredictable utilization trends. It has lowered its full-year 2025 earnings guidance by 10.2% at mid-point, just days after Centene Corporation (CNC - Free Report) shocked the managed care industry by withdrawing its financial outlook.

The announcement, which comes two weeks ahead of Molina’s scheduled second-quarter earnings release, underscores the growing strain across the sector. The company cited elevated medical costs across all of its business lines as the key reason behind the downward revision.

Molina is the latest in a string of health insurers grappling with unexpected cost pressures. UnitedHealth Group Incorporated (UNH - Free Report) had already withdrawn its 2025 earnings guidance back in May. Centene followed UnitedHealth, citing persistently higher medical costs and unforeseen enrollment shifts. Molina’s pre-announcement further highlights the ripple effect spreading through the managed care space; each time one major insurer issues a warning, its peers have faced market fallout as well.

For the second quarter of 2025, Molina now expects adjusted earnings of around $5.50 per share. That’s well below the Zacks Consensus Estimate of $6.12 per share and reflects a 6.1% decline compared to the same period last year. Looking at the full year, the company now expects adjusted earnings per share to range between $21.50 and $22.50. This marks a sharp reduction from its prior forecast of at least $24.50 and falls below last year’s figure of $22.65. It also lags behind the Zacks Consensus Estimate, which was pegged at $24.44.

On the revenue front, the Zacks Consensus Estimate for Molina’s 2025 top line stood at $44.1 billion, which indicates an 8.4% increase from the prior year, a sign that demand remains robust even amid cost headwinds.

Zacks Investment Research Image Source: Zacks Investment Research

Despite the near-term turbulence, Molina emphasized that its long-term strategic outlook remains unchanged. President and Chief Executive Officer Joseph Zubretsky reaffirmed the company’s confidence in its broader positioning, adding that even amid current challenges, the fundamentals of the business remain strong. Zubretsky hinted that the budget bill signed by President Donald Trump will not derail the company from its long-term trajectory.

Three-Month Price Performance

Shares of Molina have declined 31.6% over the past three months while the industry fell 38.9%. UnitedHealth and Centene saw even steeper losses, with shares tumbling 47.5% and 47.3%, respectively, during the same period. Meanwhile, the S&P 500 Index gained 15.1%, buoyed by strength in the tech-related sector.

Price Performance Comparison – MOH, UNH, CNC, Industry & S&P 500

Zacks Investment Research Image Source: Zacks Investment Research

Molina’s Valuation

From a valuation standpoint, Molina trades at a forward price-to-earnings ratio of 8.85, down from the industry average of 11.66. MOH currently carries a Value Score of A.

Zacks Investment Research Image Source: Zacks Investment Research

The stock currently carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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