Analyst: Centene Corp To See Wider Margins Amid Business Expansion

Centene Corp

will see widening margins as it expands into the fast-growing market for those patients receiving government health benefits who require particularly complex care, an analyst said Monday. The St. Louis-based managed care company that specializes in Medicare and other government programs, last week boosted its 2015 earnings forecast about 4 percent to between $2.70 and $2.82 a share. Analysts on average expect $2.72 a share, according to Thomson Financial Network. Cantor Fitzgerald's Joseph D. France boosted his target on Centene more than 6 percent Monday to $85, maintaining a Buy rating. France said the company is increasingly pushing into sectors requiring more complex care, including the government's Aged, Blind or Disabled Program, long-term care and patients eligible for multiple government-backed health-care programs. The sectors feature higher medical loss ratios, but "much lower" administrative costs, France said. During the first quarter, membership grew to 4.4 million in about 21 states, up 44 percent from a year earlier. https://www.sec.gov/Archives/edgar/data/1071739/000107173915000051/form10-q.htm#s834A97CA0D02AC79B2F65CA0896B6ACE Centene, which had a 2-for-one stock split in February, has seen its shares gain about 50 percent in the year to date. The company traded Monday at $77.76, up $2.37. The 18 analysts following Centene maintain an average target of $75.39 on the company, and ratings are evenly split with nine at Buy and nine at Hold, according to FactSet. Three funds, including BlackRock, Vanguard and Capital World Investors separately hold a total of about 20 percent of the company's shares, https://www.sec.gov/Archives/edgar/data/1071739/000119312515093974/d872929ddef14a.htm#toc872929_27