Key Stats for Centene Stock
- Price Change: -3.7%
- Current Price: ~$38
- Advanced Model Target: $73
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What Happened?
Shares of Centene Corporation (CNC) slid 3.7% to close near $38 on Friday, caught in a violent sector rotation triggered by the collapse of rival Molina Healthcare (NYSE:MOH).
Molina shares crashed nearly 26% after missing earnings estimates and warning of skyrocketing medical costs, sparking fears of a contagion effect across the managed care industry.
However, Centene actually beat earnings expectations for the fourth quarter, delivering adjusted EPS that topped Wall Street forecasts.
Additionally, the company also provided bullish guidance for 2026, projecting a return to profitable growth as its margin improvement initiatives take hold.
Despite the positive print, investors “shot first and asked questions later,” assuming that Molina’s utilization issues would eventually plague Centene’s Medicaid and Marketplace books as well.
Furthermore, analysts at Barclays defended the stock, noting that Centene’s exposure is structurally different and that the selloff creates a “dislocated” valuation opportunity.
The divergence between Centene’s solid execution and the market’s panic has pushed the stock to a valuation that implies zero growth, a scenario the model firmly rejects.
With the stock now testing key support levels, the focus is on whether the “guilt by association” trade will unwind as investors digest the actual numbers.
See analysts’ growth forecasts and price targets for Centene stock (It’s free!) >>>
Is Centene Undervalued Today?
During the earnings call, CEO Sarah London directly addressed the fears regarding medical cost trends.
She stated: “Despite the challenges of 2025, we entered 2026 with increased visibility… based on a very early look, nothing alarming relative to utilization patterns.”
This commentary directly contradicts the “Molina narrative,” suggesting that Centene’s underwriting discipline has protected it from the cost spikes hurting its peer.
CFO Drew Asher reinforced the outlook for margin expansion.
He noted: “We are well positioned to drive margin improvement in 2026 and over the next few years while ensuring access to high-quality, affordable health care.”
The leadership team emphasized that their diversified business model provides a buffer against the volatility seen in pure-play competitors.
Read the full Centene Transcript on TIKR to see the 2026 Guidance >>>
According to TIKR’s Advanced Valuation Model, the market is punishing Centene for crimes it didn’t commit.
- Target Price: $72.64
- Current Price: ~$38
- Potential Upside: +82.0%
Valuation Model Deep Dive
The investment case for Centene is a “value dislocation” play, where the price has detached from the fundamentals due to sector sentiment.
The model suggests that Centene’s ability to generate cash and grow earnings is vastly superior to what the current multiple implies.
- The Fair Value Gap: At $38, the stock trades at a deep discount to the $73 target, offering 82% upside as the “Molina panic” fades.
- The Growth Reality: The model forecasts a solid 23.9% Revenue CAGR (10-year historical), indicating a long-term track record of scaling despite regulatory headwinds.
- The Profitability Check: With margins expected to improve in 2026, the company is poised to accelerate EPS growth, validating the higher price target.
If Centene can continue to demonstrate stable utilization while its peers stumble, the rebound to $73 could be swift.
Conclusion: A healthy stock in a sick sector. With an 82.0% upside potential to $73, Centene represents a compelling opportunity to buy a market leader at a distress price caused by a competitor’s failure.
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How Much Upside Does Centene Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
