TLDR
- Centene stock fell 14% on Tuesday, making it the worst performer in the S&P 500 that day
- ACA enrollment is expected to drop to 3.5 million by end of Q1, down from 5.5 million in December
- The company reaffirmed adjusted EPS guidance of greater than $3 for 2026
- Mizuho cut its price target from $47 to $41, maintaining a Neutral rating
- Medicare Advantage margins remain below break-even and are expected to stay there through 2026
Centene has been a rough ride for investors this year, and Tuesday made it worse. The health insurer’s stock dropped 14% after CEO Sarah London spoke at the Barclays Global Healthcare Conference, where her comments on enrollment declines rattled the market.
London told attendees that Centene’s three core business lines remain on track for 2026. She reaffirmed adjusted earnings guidance of greater than $3 per share — matching the $3 consensus estimate from analysts polled by FactSet.
But no one was celebrating. The guidance offered no upside surprise, and investors zeroed in on the enrollment picture.
The company now expects to end Q1 with 3.5 million ACA marketplace members, down from 5.5 million in December. As of February, Centene stood at 3.6 million enrollees.
London said Centene had anticipated the market would shrink “somewhere between the high teens and the mid-thirties” in percentage terms. She added the company expected to land “at the higher end of that and possibly higher than the top end of that.”
She attributed part of the drop to deliberate pricing decisions taken at the start of the year, with Centene prioritizing margin improvement over membership growth.
Medicare Advantage Still a Drag
Centene’s Medicare Advantage business continues to weigh on results. Margins were negative in 2025 and are expected to remain slightly below break-even in 2026, with a target of reaching break-even in 2027.
Also hanging over the stock is the final rate decision from the Centers for Medicare and Medicaid Services, due no later than April 6. The Trump administration earlier proposed keeping Medicare rates roughly flat in 2027, which hit Centene and its peers hard.
London said the company submitted comments to CMS on the Advance Rate Notice and expressed hope the final rates would better reflect recent medical cost trends across the industry.
Analyst Reaction
Mizuho moved quickly after the conference. The firm cut its price target on Centene to $41 from $47 while keeping a Neutral rating.
Mizuho cited concerns around health insurance exchange dis-enrollment and specialty drug trends. The firm said it is applying a more conservative valuation multiple until there is greater clarity on how bad the enrollment situation might get.
Truist Securities held a more optimistic view, maintaining a Buy rating with a $49 price target, citing margin opportunities and management confidence. Cantor Fitzgerald stuck with a Neutral rating and a $41 target, describing the 2026 operating environment as challenging.
For context, Centene has now fallen 9.7% in 2026, against a 0.7% decline for the S&P 500.
The stock has still held up better than some peers. Molina Healthcare is down 17% year-to-date, Elevance Health is down 18%, and UnitedHealth Group has dropped 14%.
Centene’s Q4 2025 earnings showed an adjusted diluted loss per share of $1.19, which came in slightly better than the forecast of $1.22. Revenue hit $49.73 billion, beating the $48.39 billion estimate.
InvestingPro pegs Centene’s fair value at $62.11, with analysts projecting EPS of $3.05 for full-year 2026.
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