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Centene Corp CNC

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Centene Turns in a Solid Q3, and Shares Remain Attractively Valued

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Centene turned in solid third-quarter results, and our 2021 expectations remain roughly in line with management's updated guidance. We are maintaining our $91 fair value estimate and think shares remain undervalued, closing on Oct. 25 at just 13 times 2021 expected earnings, with the potential to materially accelerate bottom-line growth in the intermediate term. We continue to see a narrow economic moat around Centene, which maintains strongholds in government-sponsored programs like its leading positions in Medicaid and the individual exchanges and a growing position in Medicare Advantage.

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Company Profile

Business Description

Centene is a managed-care organization focused on government-sponsored healthcare plans, including Medicaid, Medicare, and the individual exchanges. After acquiring WellCare in early 2020, Centene now serves 21 million medical members, mostly in Medicaid (14 million), Medicare Advantage (1 million total), the individual exchanges (2 million), and other plans (4 million), including Tricare (West region), correctional facility, and international plans. The company also serves 4 million users through the Medicare Part D pharmaceutical program.

7700 Forsyth Boulevard, Centene Plaza
St. Louis, MO, 63105
T +1 314 725-4477
Sector Healthcare
Industry Healthcare Plans
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 71,300