Research Alert: Centene: Hbr Improvement Supports Q1 Eps Beat, Yearly Guidance Increase
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:Centene reported Q1 adjusted EPS of $3.37 (+16.2% Y/Y), beating the consensus by $1.24, with the HBR improving 20 bps to 87.3% despite Marketplace membership declines from ACA enhanced premium tax credit expiration. Revenue rose 5.1% to $44.7B, due to premium yield improvements and Medicare PDP membership growth (+11.6% to 8.78M), while Commercial membership fell 33% to 4.06M. We view the 30 bps SG&A expense ratio improvement to 7.6% and $1.0B debt reduction as demonstrating effective expense management and disciplined capital allocation focused on debt reduction over share repurchases. Management raised 2026 adjusted EPS guidance to at least $3.40 from $3.00, supported by successful Medicaid performance, while maintaining HBR guidance midpoint at 91.3%. We look for more detail on looming Medicaid headwinds from the OBBBA legislation and management's outlook for the second half, as shares extended their rally off March lows with ~3% premarket gains.
