Centene maintains earnings forecast amid Medicare Advantage competition

Health insurer Centene (CNC) is sticking with earnings forecasts after competitor Humana last week cut its own forecast for Medicare Advantage enrollment, sending the stock tumbling.

​​“We are feeling good about the guidance we provided back in December,” Centene Vice Chairman Sarah London told Yahoo Finance Live. Centene reaffirmed its 2021 guidance last month, and said it was targeting earnings per share of $4.07 to $4.23 in 2022.

“We did expand this year as part of open enrollment and we saw really strong performance in the Medicare Advantage product,” London said. “That’s really a byproduct of a lot of work we’ve done over a number of years and it’s bringing together the product expertise of Wellcare with the geographic expansion and provider relationships that Centene has.”

Centene shares fell 4% on Jan. 6, the day Humana cut its forecast, and have since bounced back by 5%. In the past year, the stock has gained more than 20%, outpacing Humana but underperforming Anthem and UnitedHealth. Centene is the smallest by market cap of the four managed-care companies in the S&P 500.

London's comments followed the company's presentation at the annual JPMorgan Healthcare Conference. JPMorgan analyst Calvin Sternick wrote in a note, Centene "is tracking towards a mid-teens Medicare Advantage membership growth rate in 2022, and management noted they have not seen a material change in competitive dynamics in the MA market relative to prior years. This gives us increased confidence in the long-term margin profile for the MA business."

Centene has had an eventful year. The company’s longtime chief executive, Michael Neidorff, said in December that he would step down, under pressure from activist investor Politan Capital Management. A search for his successor is underway. Last week, the company completed the acquisition of Magellan Health, a year after the $2.2 billion deal was first announced.

Barclays Capital reinstated coverage of Centene with an Overweight rating following the deal closing. "We believe the company is poised to continue to capture the increasing penetration of managed Medicaid in the overall space, and the most recent investor day instilled confidence in accelerated growth in 2023 and 2024 following the choppiness of the redetermination process," wrote analyst Steven Valiquette.

Centene is scheduled to report earnings on Feb. 8.

Julie Hyman is the co-anchor of Yahoo Finance Live, weekdays 9am-11am ET. Follow her on Twitter @juleshyman, and read her other stories.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn