Centene Corporation (NYSE: CNC) has snapped back into the spotlight.
On December 11, 2025, Centene stock surged above $40 after Robert W. Baird lifted its price target from $28 to $36 while maintaining a neutral rating. The move added to a sharp multi-week rebound following a brutal summer of guidance cuts, goodwill impairments and a rare quarterly loss. [1]
At Thursday’s close, CNC traded around $40.73, up roughly 5.3% on the day, with an intraday high near $40.90. [2] That rally puts shares about 62% above their 52‑week low of $25.08, but still roughly 39% below the 52‑week high of $66.81 set in early February. [3]
So is this just an analyst‑driven bounce, or the start of a durable recovery in Centene’s 2025–2026 earnings story? Let’s unpack the latest news, forecasts and analyses as of December 11, 2025.
Centene stock today: why CNC is rallying on December 11, 2025
1. Baird raises the bar – but still sees downside
Baird’s new $36 price target, up from $28, is the headline catalyst for Thursday’s move. The firm kept a neutral rating and explicitly noted that $36 implies downside from the pre‑upgrade price (about an 8% drop from roughly $39). [4]
Despite that caution, traders treated “less bearish” as good enough. MarketBeat reports that CNC was up about 5.2% intraday after the upgrade, with volume below its usual heavy trading but still robust. [5]
2. Trading above many analyst targets
As of today:
- MarketBeat’s compilation shows an average price target around $40–$40.50, with 3 Buy, 15 Hold and 3 Sell ratings – a consensus “Hold.” [6]
- FactSet data cited by MT Newswires/MarketScreener puts the mean target slightly lower, around $38.56, still in the high‑30s. [7]
- TipRanks lists a 12‑month average target of $39.92 with a Hold consensus and estimated 3.2% upside from its reference price. [8]
- QuiverQuant’s tally of 14 recent targets shows a median around $34, with individual calls ranging from $28 to $39. [9]
With CNC now around $40.70, the stock is trading at or slightly above many of these targets. The market is essentially saying: “We think the worst is behind Centene faster than the spreadsheets do.”
3. Technical and short‑term models turning positive
Technical forecasters noticed the momentum before today’s spike. On December 10, StockInvest.us flagged CNC as a short‑term “buy candidate,” expecting a December 11 opening near $38.27 and a typical intraday swing of about ±3.6%. [10]
Reality came in hotter: the stock pushed into the $40s, overshooting their projected range as sentiment re‑rated on the Baird move.
From guidance shock to Q3 reset: Centene’s 2025 rollercoaster
To understand today’s enthusiasm, you have to rewind through a very noisy 2025.
July: guidance withdrawal and first loss in 13 years
On July 1, 2025, Centene withdrew its entire 2025 earnings guidance after new Marketplace risk‑adjustment data showed a much sicker, more expensive membership mix than it had assumed. [11]
Key pieces from the company’s own update:
- New Health Insurance Marketplace data (from actuary Wakely) implied that market morbidity in 22 of Centene’s 29 Marketplace states was “significantly higher” than its previous assumptions. [12]
- Centene estimated a roughly $1.8 billion reduction to its expected net risk‑adjustment revenue, translating to about $2.75 of adjusted EPS impact for 2025 – before considering the remaining seven states. [13]
- The company flagged a “step‑up” in Medicaid cost trend, driven by behavioral health, home health and high‑cost drugs, particularly in states like New York and Florida. [14]
Reuters reported that the guidance withdrawal sent shares down nearly 22% in extended trading, and broader coverage noted that CNC plunged over 30% around that time as investors digested the news. [15]
Shortly afterward:
- UBS downgraded Centene on concerns about the withdrawn outlook and earnings visibility. [16]
- Q2 2025 results showed an adjusted loss per share of –$0.16 vs a forecasted +$0.23, Centene’s first quarterly loss in about 13 years, even as revenue surprised to the upside. [17]
Not surprisingly, that combination also triggered a securities‑fraud class action alleging misstatements about enrollment and morbidity trends between December 2024 and June 2025. [18]
Q3 2025: big impairment, better operations
Fast‑forward to Q3 2025, reported on October 29:
- Revenue: $49.69 billion, up 18.2% year over year, beating consensus by about 4–5%. [19]
- Premium & service revenue: $44.9 billion, up 22% vs Q3 2024, driven by Prescription Drug Plan (PDP) and Marketplace growth plus Medicaid rate increases. [20]
- Adjusted EPS: $0.50, versus a forecasted loss of roughly $0.21 per share – a big beat, though still well below the prior‑year $1.62. [21]
- Health benefits ratio (HBR): 92.7% (percentage of premium spent on care), up from 89.2% a year earlier, reflecting higher Marketplace costs and Medicaid utilization. [22]
- Cash flow from operations: about $1.4 billion for the quarter. [23]
The ugly headline number was GAAP diluted EPS of –$13.50, driven by a $6.7 billion non‑cash goodwill impairment. Centene said this was meant to reflect expected headwinds from future policy changes, including President Trump’s proposed tax and budget bill (which would cut Medicaid funding from 2027) and potential expiration of enhanced ACA subsidies at the end of 2025. [24]
That impairment dragged trailing 12‑month EPS to about –$10.75 as of September 30, 2025, even though underlying operations remained profitable. [25]
Guidance rebuilt – carefully
Despite the impairment, management sounded more confident:
- Centene raised its 2025 adjusted EPS outlook from about $1.75 to at least $2.00, citing better‑than‑expected Medicaid performance and an improving margin trajectory. [26]
- CFO Drew Asher told Reuters that Centene aims to grow adjusted EPS in 2026, with a formal 2026 forecast expected in early February 2026. Analysts currently expect around $3.00 of EPS for that year. [27]
Mathematically, if CNC earns $3.00 in 2026 and the stock sits around $40.70, that implies a forward P/E of roughly 13–14x, a discount to many large managed‑care peers but not “deep distress” territory. [28]
What Wall Street thinks now: price targets, ratings and valuation
The Baird move is part of a broader, very mixed analyst landscape.
Ratings cluster around “Hold”
From various aggregators:
- MarketBeat: 3 Buy, 15 Hold, 3 Sell; consensus “Hold” and average target around $40–$40.50. [29]
- TipRanks: consensus “Hold”, Smart Score 6/10 (neutral), average target $39.92 with roughly 3% upside, but bloggers’ sentiment runs strongly bullish (≈95%). [30]
- QuiverQuant/FactSet: 14 analysts in the last six months, median target $34, with Barclays at $35, Truist at $39, and others between $28 and $38. [31]
Translation: the sell‑side is cautiously skeptical, not in love. Most teams acknowledge improved fundamentals post‑Q3 but still worry about elevated medical costs, policy uncertainty and the risk that 2025–2026 margins don’t fully normalize.
Valuation: cheap on sales, messy on earnings
Depending on which metric you pick, CNC looks either beaten‑up or fairly ordinary:
- TipRanks shows Price‑to‑Sales around 0.19x and Price‑to‑Book about 1.2x, both low for a large national managed care company. [32]
- 24/7 Wall St. goes even further, citing a price‑to‑sales ratio near 0.11x and P/B below 0.9x when the stock was in the mid‑$30s in November – numbers that scream “deep value” if margins recover. [33]
- Fullratio notes that trailing EPS is –$10.75 due to the goodwill hit, making the trailing P/E meaningless, but highlights long‑term EPS growth averages in the mid‑teens over five and ten years. [34]
- Compared with peers like Molina (MOH), Cigna (CI), UnitedHealth (UNH) and Humana (HUM), Centene’s long‑term EPS growth has actually been solid, but its current reported profitability (ROE around –22%) lags because of the impairment and elevated HBR. [35]
If you believe the impairment is mostly an accounting write‑down and not a permanent impairment of earnings power, the low revenue multiple is appealing. If you think policy pressure will keep margins thin for years, the discount is deserved.
Beyond Wall Street: funds, quants, insiders and Reddit traders
The CNC story in late 2025 isn’t just about analyst models. Other players are signaling their own verdicts.
Value fund view: cheap scale in Medicaid
In a recent Q3 2025 letter, Hotchkis & Wiley’s Mid‑Cap Value Fund argued that CNC shares, despite their drawdown, look attractive at roughly 4.8x “normal” earnings and benefit from powerful scale advantages in Medicaid. [36]
They highlight:
- Centene’s position as a managed Medicaid leader with ~28 million at‑risk members.
- CMS forecasts that Medicaid spending should grow about 6% annually from 2020–2027, largely from rising spend per member. [37]
Their thesis: if Centene can push through appropriate rate increases and manage medical costs, the business can grow with relatively modest capital needs.
Skeptical quant: “one of two under $50 we’d sell”
StockStory took the opposite side in a December 9 note, grouping Centene among “Two Stocks Under $50 to Sell.” Their concerns: [38]
- Customer growth disappointment over the last two years, suggesting the value proposition isn’t clearly winning.
- Earnings per share declining ~5% annually over five years, despite revenue growth, implying weaker incremental profitability.
- Diminishing returns on capital from a low base, raising questions about management’s capital allocation and past strategic bets.
At about $37.71 when they wrote, they pegged CNC at ~15.6x forward P/E and concluded there were better opportunities elsewhere.
Retail traders and “value trap vs deep value”
24/7 Wall St. recently documented a wave of Reddit‑driven dip‑buying in CNC after the post‑guidance collapse: [39]
- From a November 10 low of $34.25, shares climbed 6.2% to $36.38 as activity on r/wallstreetbets spiked.
- Reddit sentiment scores held in the 65–72 range (on a 0–100 scale where 50 is neutral), suggesting persistently bullish chatter.
- Bulls pointed to 0.106x sales and 0.85x book value as evidence of extreme undervaluation, along with 22% premium revenue growth and 66% Medicare revenue growth in Q3.
The same article called out the core bear argument:
- Trailing GAAP EPS is deeply negative from the impairment.
- Health benefits ratio climbed from 89.2% to 92.7%, signaling higher medical costs.
- Return on equity is roughly –22%, a big red flag for traditional value investors. [40]
In Reddit language: CNC might be “the most undervalued stock in healthcare” – or a classic value trap.
Institutional and insider signals
On the institutional side:
- State Street raised its CNC stake by about 2.3% in Q2, to over 23 million shares (~4.7% of the company). Vanguard, Geode, Invesco and others also added to positions. [41]
- A separate 13F‑driven piece notes that overall 93%+ of CNC shares are held by institutions/hedge funds, underscoring that this is still a “big‑money” name even as retail traders pile in. [42]
QuiverQuant’s breakdown of flows is more nuanced: some large managers dramatically cut exposure after the guidance shock, while others like Capital World Investors and Deerfield Management markedly increased theirs. [43]
Insiders have also stepped in:
- CEO Sarah London bought 19,230 shares around $25.50 in August 2025.
- Director Theodore Samuels II added 9,000 shares. [44]
Insider buying after a crash is not a guarantee of anything, but it typically isn’t a bearish signal.
Key risks still hanging over CNC stock
Even with the December 11 bounce, several unresolved issues hang over Centene’s 2025–2026 story.
1. Marketplace risk and ACA subsidies
The whole guidance drama started with Marketplace risk‑adjustment. Centene’s July update projected a $1.8 billion shortfall in net risk‑adjustment revenue for 22 states – and hinted that the remaining seven states were likely negative as well. [45]
On top of that:
- Centene’s Q3 impairment explicitly incorporated the possibility that enhanced ACA premium subsidies will expire at the end of 2025, which would likely reduce Marketplace membership and margin. [46]
- Fortune and other outlets have tied some of the stock’s 2025 volatility to worries about what happens when those subsidies sunset and how the 2026 Marketplace will be priced. [47]
Centene says it has refiled 2026 Marketplace rates to reflect higher morbidity and expects to secure corrective pricing in states representing the bulk of its membership footprint. [48] How regulators respond will be a crucial 2026 margin driver.
2. Medicaid cost trends and new quality rules
Medicaid remains Centene’s largest and most strategically important business. The company is:
- Benefiting from rate increases in some states. [49]
- Simultaneously grappling with persistently higher cost trends in behavioral health, home health and specialty drugs. [50]
A newly introduced bill in Congress, the Continuous Skilled Nursing Quality Improvement Act of 2025 (H.R. 6592), would set national quality standards for continuous skilled nursing services under Medicaid and update quality measures regularly. Centene is explicitly flagged as a “relevant company” in QuiverQuant’s legislative coverage, meaning these rules could tighten requirements and costs around some of its most complex Medicaid populations. [51]
Policy isn’t just a backdrop for CNC – it’s the operating environment.
3. Legal and reputational overhang
The August 11 securities class action claims Centene misled investors about enrollment and morbidity trends during the period leading up to the guidance withdrawal. [52]
Add that to:
- Ongoing scrutiny of Medicaid billing practices in various states in prior years. [53]
- The sheer size of the $6.7 billion impairment, which – while non‑cash – signals that past acquisitions or assumptions about long‑term profitability were too optimistic. [54]
None of this guarantees additional charges or fines, but it does raise the risk that Centene spends more time and money dealing with regulators, litigators and rating agencies than it would like.
So what does December 11 actually change for Centene stock?
Today’s move doesn’t magically erase the structural challenges facing Centene, but it does underscore a few important points:
- The market believes the July panic was overdone.
CNC has gained over 50% since mid‑August, making it one of the stronger S&P 500 performers over the last four months. [55] - Baird’s upgrade is a sentiment event, not a full‑throated endorsement.
Raising the target from $28 to $36 and sticking with neutral is basically saying: “We underestimated the resilience here, but we’re not ready to pound the table.” [56] - Consensus expectations remain modest.
Across MarketBeat, TipRanks, FactSet and Quiver, most analysts sit at “Hold,” with price targets clustered from the mid‑30s to about $40. That’s very much a “show me” stance. [57] - The long‑term thesis hinges on 2026.
Management has to prove that refilled Marketplace rates, Medicaid repricing and cost control can deliver the 2026 EPS growth hinted at in Q3 commentary. The formal 2026 outlook coming in early 2026 is the next major checkpoint. [58]
For now, CNC sits in an intriguing middle zone: valued like a damaged asset on revenue multiples, but with enough operational progress and insider/institutional support to keep optimists engaged. Whether that ends up being a bargain or a value trap will depend heavily on 2026 policy outcomes and Centene’s execution on Medicaid and Marketplace margins.
References
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