Centene (CNC) Stock Jumps 8.1%: Will It Continue to Soar?

Centene (CNC) shares soared 8.1% in the last trading session to close at $70.45. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.9% gain over the past four weeks.

The company recently delivered first-quarter 2020 adjusted earnings per share of $1.63, which improved 89.5% year over year attributable to higher revenues.

In the first quarter, total revenues improved 15% year over year to $30 billion resulting from the WellCare buyout and the continuing suspension of Medicaid eligibility redeterminations. As of Mar 31, 2021, managed care membership totaled 25.1 million, which climbed 5% year over year attributable to robust Medicare and Medicaid businesses.

After its strong first-quarter results, the company revised its full-year outlook for 2021. For the current year, management anticipates revenues to be $120.1-$122.1 billion higher than the previous guidance of $116.1-$118.1 billion. In 2021, the company’s adjusted EPS is expected to be $5.05-$5.35, up from the previous guidance of $5-$5.30.

Price and Consensus

Price Consensus Chart for CNC

This healthcare company is expected to post quarterly earnings of $1.61 per share in its upcoming report, which represents a year-over-year change of -32.9%. Revenues are expected to be $30.14 billion, up 8.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Centene, the consensus EPS estimate for the quarter has been revised 12.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CNC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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