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[MM Curator Summary]: Analysts understand what the end of the PHE means to plans with big Medicaid books of business.
Centene Corporation (NYSE:CNC) dropped as much as 5% on Tuesday after Bank of America downgraded the health insurer to Underperform from Neutral, citing its concerns about the potential for Medicaid redeterminations starting next year.
“We are downgrading CNC to underperform from Neutral and upgrading MOH from underperform to Neutral on what we see as a better risk/ reward at MOH between the two Medicaid MCOs,” the analyst Kevin Fischbeck wrote, lowering the price target on CNC to $85 from $100 per share.
Millions of Americans are at risk of losing insurance coverage as Medicaid continuous enrollment requirement, under which Medicaid programs received federal funding to keep people continuously enrolled through the pandemic, is set to expire with the end of the COVID emergency.
However, in November, the Biden administration did not indicate any plans to end the emergency status when it expires in January, signaling that the declaration could extend until spring.
Wall Street has remained bullish on Centene (CNC) stock, with an average rating of Buy from analysts in line with Seeking Alpha Author ratings. However, Seeking Alpha’s Quant System, which consistently beats the market, rated CNC as a Hold.