ST. LOUIS, MO - Centene Corporation (NYSE:CNC), a leading healthcare enterprise, announced today that nearly half of its Medicare Advantage members are now in plans rated 3.5 stars or higher according to the 2025 Medicare Advantage Star Ratings released by the Centers for Medicare and Medicaid Services (CMS) on October 10, 2024.
This is a significant increase from approximately 23% in the previous year and aligns with the company's internal projections despite industry-wide concerns over changes to rating criteria.
The improvement in star ratings is a key performance indicator for Medicare Advantage plans, as higher ratings can influence consumer choice and affect federal payments to insurers. Centene also disclosed that it is appealing certain results with CMS, indicating a proactive approach to addressing aspects of the ratings it disputes.
Centene's announcement, based on a press release statement, underscores the company's efforts to enhance the quality of care and services provided to its members. This progress is particularly noteworthy given the competitive nature of the Medicare Advantage market and the complex regulatory environment healthcare companies navigate.
In other recent news, Centene Corporation reported strong second-quarter earnings, with an adjusted diluted earnings per share (EPS) of $2.42, reflecting a 15% increase from the previous year. The company has raised its full-year premium and service revenue expectations to between $141 billion and $143 billion, indicating confidence in future growth.
Meanwhile, Centene's board member Lori J. Robinson has decided not to seek re-election at the company's 2025 Annual Meeting. In other company developments, Centene expanded its Board of Directors with the appointment of Thomas R. Greco, a seasoned leader with over 40 years of experience in public companies.
On the analyst front, Jefferies maintained a Hold rating on Centene but lowered its price target to $72.00. Wells Fargo (NYSE:WFC) and TD (TSX:TD) Cowen upgraded their price targets for Centene to $93.00 and $89.00 respectively, maintaining positive ratings on the stock.
Additionally, Centene's subsidiary, Health Net Community Solutions, has been awarded a contract to provide managed dental health care services to Medi-Cal beneficiaries in Los Angeles and Sacramento counties. This 54-month contract solidifies Health Net's role as a provider of both medical and dental coverage in these regions.
These are recent developments that investors should take note of.
InvestingPro Insights
Centene Corporation's recent announcement of improved Medicare Advantage Star Ratings aligns with its strong market position and financial performance. According to InvestingPro data, Centene boasts a substantial market capitalization of $37.67 billion, reflecting its significant presence in the healthcare sector. The company's revenue of $144.06 billion for the last twelve months as of Q2 2024 demonstrates its robust operational scale.
InvestingPro Tips highlight Centene's financial strength and market positioning. The company is noted as a "Prominent player in the Healthcare Providers & Services industry," which supports its ability to improve Medicare Advantage ratings. Additionally, Centene "Operates with a moderate level of debt," potentially providing financial flexibility to invest in quality improvements that could further boost its star ratings.
It's worth noting that Centene is "Trading at a low revenue valuation multiple," which could be attractive to investors considering the company's recent performance improvements. However, investors should also be aware that "7 analysts have revised their earnings downwards for the upcoming period," suggesting some caution may be warranted.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for Centene Corporation, providing a more comprehensive view of the company's financial health and market position.
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