Centene has 'compelling upside,' Bernstein says company is attractive By Investing.com

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Centene has 'compelling upside,' Bernstein says company is attractive

Published May 31, 2023 14:34

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Centene has 'compelling upside,' Bernstein says company is attractive

CNC

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Bernstein analysts said Wednesday that they see compelling upside in Outperform-rated Centene (NYSE:CNC) at its current valuation.

The analysts, who have a $92 price target on the stock, take the view as "Redetermination uncertainty is reduced over the summer."

"We believe the company is attractive based on our long-term outlook for growth in this sector, excessive pessimism about the impacts of Redetermination (or kicking people off Medicaid post-COVID), and the company's value creation plan to harvest cost savings from recent growth," wrote the analysts.

"Redetermination appears priced into the stock - 2023 has been a challenging year for stocks with material exposure to Medicaid, with CNC down 20+% YTD, due to concerns about the impact of redeterminations," they added.

Bernstein also believes that Medicaid is an attractive long-term growth sector, and should receive a market multiple over time, while the analysts also noted that CNC's "current relative valuations are near historic lows."

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