Centene Corporation CNC recently revealed its 2025 outlook at its investor day, reaffirming its 2024 guidance.The company continues to expect premium and service revenues within $143.5-$144.5 billion, up from the 2023 figure of $140.1 billion.

Adjusted earnings per share (EPS) is projected to be at least $6.80, suggesting a significant improvement from the 2023 reported figure of $6.68. The Zacks Consensus Estimate for the same is currently pegged at $6.83 per share. The company also reiterated its HBR guidance in the band of 88.3-88.5%.

2025 Outlook

Centene expects total revenues within $166.5-$169.5 billion, higher than the 2024 expected figure of $159-$161 billion. The company estimates premium and service revenues to be in the $154-$156 billion range, higher than the 2024 guided range. Factors contributing to year-over-year growth include rate increases, expansion into new markets for Medicaid, continued growth in individual health insurance, rising number of uninsured individuals for Marketplace and dual expansions, and improvements in Star ratings for Medicare business.

Centene's 2025 adjusted EPS is projected to exceed $7.25, indicating growth from the 2024 estimate of at least $6.80 per share. This underscores positive operational momentum. The 2025 adjusted EPS guidance surpasses the Zacks Consensus Estimate of $7.01 per share. It continues to expect adjusted profit to achieve an average annual growth of 12-15% over the long term.

Centene expects the health benefits ratio to be within 88.4-89% in 2025. The company also estimates the adjusted SG&A expense ratio to be in the 8.1-8.7% range. It projects the adjusted effective tax rate between 22% and 23%.

Diluted shares outstanding for 2025 are expected to be 491-494 million. It anticipates to repurchase shares worth $2 billion in late 2025. CNC also expects to achieve its long-term revenue growth CAGR of 7-8%. Medicaid is expected to grow 6-7%, Marketplace in the mid to high single digits, and Medicare in the high single digits to 10% in the long term.

CNC’s Price Performance

Centene’s shares have plunged 24.3% in the year-to-date period compared with the industry’s 11.4% decline.

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CNC's Zacks Rank & Key Picks

Centene currently carries a Zacks Rank #3 (Hold).

Some better-ranked and promising stocks in the broader Medical sector are Pediatrix Medical Group, Inc. MD, CareDx, Inc. CDNA and Encompass Health Corporation EHC. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Pediatrix Medical’s current-year earnings indicates 7.1% year-over-year growth. MD beat earnings estimates in three of the trailing four quarters and met once, with an average surprise of 9.9%. The consensus mark for its current-year revenues is pegged at $2 billion.

The Zacks Consensus Estimate for CareDx’s current-year earnings indicates a 167.2% year-over-year improvement. CDNA beat earnings estimates in each of the trailing four quarters, with an average surprise of 135.2%. The consensus mark for revenues implies 17.5% growth from the year-ago period.

The Zacks Consensus Estimate for Encompass Health’s 2024 earnings implies a 17.6% increase from the year-ago reported figure. EHC beat earnings estimates in each of the trailing four quarters, with an average surprise of 13.6%. The consensus mark for its current-year revenues is pegged at $5.34 billion, which indicates an 11.2% year-over-year increase.

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