Cantor Fitzgerald Downgrades Centene (CNC) to Hold; Shortfall Is A Big Psychological Blow To Medicaid Names

June 11, 2012 1:15 PM EDT
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Price: $63.09 -0.35%

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Cantor Fitzgerald downgraded Centene (NYSE: CNC) from Buy to Hold with a price target of $29.00 (from $46.00).

Analyst, Joseph D. France, said, "Centene's announcement this morning of major cost problems in Kentucky and Texas (new markets), and problems with the individual business in Massachusetts, marks its first significant earnings disappointment in years, and we expect it to weigh on the group for a while. Adverse selection, retroactive assignments and delays in filing claims are common enough problems in the industry, but as a leading pure play Medicaid name, Centene's experience raises concern about new markets to come, and the role of these companies as a group in the handling of more complex disabled and dual eligible cases."

"...lowered our EPS estimates from $2.75 to $1.50 in 2012 and from $3.15 to $2.00 in 2013."

For an analyst ratings summary and ratings history on Centene click here. For more ratings news on Centene click here.

Shares of Centene closed at $35.47 yesterday.

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