Analyst Note
| Julie Utterback, CFA |After only low-single-digit earnings growth in 2021, we think further value could be unlocked at Centene if it can meet its midteens earnings growth goal for 2021-24. We have similar assumptions baked into our $91 fair value estimate and continue to view the shares as significantly undervalued in a managed-care organization sector that appears about fairly valued on average. As with the other MCOs we cover, we think a narrow economic moat surrounds Centene's top-tier medical insurance position. Unlike its peers, though, Centene focuses primarily on government-sponsored programs and also boasts the leading position on the individual exchanges, which is expected to be the key vehicle for increasing the insured rate in the United States and could provide a near-term catalyst for Centene.