Centene Corporation (NYSE:CNC) is one of billionaire Cliff Asness’ top 10 healthcare stock picks. On June 23, RBC Capital analyst Ben Hendrix initiated coverage of Centene Corporation (NYSE:CNC) with a Sector Perform rating and a price target of $70.
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Hendrix acknowledged that Centene entered 2026 showing clear early signs of a recovery, which is a massive contrast to the brutal conditions that defined 2025. In 2025, the company was faced with soaring medical costs, policy uncertainty around the Affordable Care Act, or ACA, subsidies, and a difficult Medicaid environment. All these together impacted the stock and sent it to historic lows, the analyst noted.
Hendrix is certain that Medicaid is a key pillar of the stock this time around. He expects margins to keep improving as state reimbursement rates gradually catch up with the actual medical costs Centene is incurring, which is a lag that had been one of the main profit drags on the business in prior years. On Centene’s ACA exchange business, often referred to as the Health Insurance Marketplace, the analyst also views the margin outlook favorably. He pointed to pricing adjustments Centene has made across its ACA portfolio that are expected to improve profitability going forward. This is even as the company deals with a higher-cost membership base following the expiry of enhanced premium subsidies.
Hendrix also sees potential for Centene’s 2026 earnings per share to come in above its own guidance if risk adjustment receivables remain stable.
Centene Corporation (NYSE:CNC) is a managed care company. It provides health insurance coverage and related services to individuals and families through government-sponsored programs, including Medicaid, Medicare, and the Health Insurance Marketplace.
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