Is CNC going to bounce back to at least where it was in march by the end of the year

``` The deep research logic is organized as follows: Okay, let's tackle this question about whether Centene (CNC) will bounce back to its March 2025 closing price by the end of the year. First, I need to gather all the relevant data from the provided references and background information. Starting with the user's question: "Is CNC going to bounce back to at least where it was in March by the end of the year?" The user is asking about the stock's potential recovery to its March 2025 closing price, which was $60.71 according to Reference 22. The current price as of July 24, 2025, is $26.76, so the stock has dropped significantly. Looking at the recent price changes, Reference 1 shows that on July 24, 2025, CNC had a pre-market drop of -2.75% and a post-market gain of +1.34%. The daily percentage changes over the past two weeks (Reference 2) show volatility, with days of both gains and losses. The stock has been quite volatile, which is a key point. Next, the background information includes several articles about CNC. The bull case theory (Reference 3) mentions that CNC's stock has been punished due to the One Big Beautiful Bill Act (OBBBA), which cuts Medicaid spending. The company withdrew its 2025 EPS guidance after a $1.8 billion downward adjustment in risk-adjustment payments. However, the balance sheet is strong enough to absorb the hit. The article also notes that hedge fund holdings decreased from 72 to 64 in the first quarter, indicating some institutional skepticism. There are multiple class action lawsuits mentioned (References 4, 13, 14, 18, 30, 38, 39), which could impact investor sentiment. The lawsuits allege misleading statements about enrollment and morbidity rates, leading to a significant stock drop in July 2025. The deadlines for these lawsuits are approaching, which might cause further volatility. The earnings preview (Reference 5) states that Q2 2025 earnings are scheduled for July 25, with a consensus EPS estimate of $0.23 (-90.5% YoY) and revenue of $44.2B (+10.9% YoY). The company has a history of beating EPS estimates 88% of the time but has seen downward revisions. The article also mentions that CNC is seeking sharp premium hikes for 2026, which could be a positive sign for future profitability. The bear case (Reference 6) highlights the $1.8 billion shortfall in risk-adjusted revenues, leading to a $2.75 impact on EPS. Management expects further declines in risk-adjusted revenues. Wells Fargo downgraded the stock to Equal-Weight with a price target cut from $72 to $30. The article also mentions that CNC is making defensive pricing adjustments, which might stabilize the business but could take time. Analyst opinions (Reference 7) show that 4 firms have buy ratings and 0 sell ratings, with a median price target of $45. This suggests some optimism but also caution. The stock has seen significant institutional activity, with some firms adding shares and others reducing holdings. The market context (References 8-12) indicates that overall market sentiment is positive due to easing trade tensions and some sector-specific news. However, chip stocks are under pressure, which might not directly affect CNC but shows broader market dynamics. Looking at the technical analysis (Reference 49), the resistance level near the March 2025 closing price is $66.52. The current price is $26.76, so a bounce back to $60.71 would require a significant upward movement. The stock's recent volatility and the presence of multiple catalysts (earnings, regulatory changes, lawsuits) suggest that while a recovery is possible, it's not guaranteed. The user's profile mentions a focus on SaaS and digital music, but they're asking about CNC, which is in the healthcare sector. Their investment style includes technical analysis and news-driven strategies, so they might be interested in both fundamental and technical factors. Putting this all together, the key factors are: 1. Recent stock performance and volatility. 2. Regulatory risks from OBBBA and potential impact on Medicaid business. 3. Earnings outlook and guidance withdrawal. 4. Institutional activity and analyst sentiment. 5. Legal risks from class action lawsuits. 6. Technical resistance levels. The conclusion needs to balance the potential for recovery against the significant headwinds. The stock has a low P/E ratio (8.66) and institutional interest, but the legal and regulatory issues are substantial. The upcoming earnings report and any updates on the OBBBA implementation will be critical. The technical resistance level is much higher than the current price, indicating a tough path to recovery. I should structure the answer with a clear conclusion, followed by a detailed analysis covering each of these points, using the provided data and references. Make sure to include the visualization for the pre-market and post-market changes as per the requirements. ``` ### 🌟 **Conclusion** **Centene (CNC)** faces significant headwinds but shows potential for a partial recovery to its March 2025 closing price of **$60.71** by year-end. However, achieving this target hinges on **successful earnings recovery**, **favorable regulatory developments**, and **resolution of legal risks**. Let’s break it down. --- ### 📊 **Analysis** #### 1. **Recent Stock Performance** - **Current Price**: $26.76 (as of July 24, 2025) . - **March 2025 Closing Price**: $60.71 . - **Recent Volatility**: - Pre-market drop: -2.75% on July 24 . - Post-market rebound: +1.34% on July 24 . - 2-week price swings: -40.4% drop on July 2 (post-guidance withdrawal) to +5.49% rally on July 23 . #### 2. **Key Catalysts** - **Earnings Report (July 25, 2025)**: - Consensus EPS: $0.23 (-90.5% YoY) . - Revenue: $44.2B (+10.9% YoY) . - Risk: Management may face questions about the $1.8B risk-adjustment shortfall . - **Regulatory Risks**: - **One Big Beautiful Bill Act (OBBBA)**: Medicaid spending cuts ($1T over 10 years) threaten CNC’s core business . - **Work Reporting Requirements**: 41 states must impose new Medicaid enrollment rules by 2026, risking enrollment declines . - **Legal Battles**: - Multiple class action lawsuits allege misleading statements on enrollment and morbidity rates . - Lead plaintiff deadlines: September 8, 2025 . #### 3. **Fundamental Outlook** - **Valuation**: - P/E (TTM): 8.66 (undervalued vs. industry average) . - EPS YoY Growth: 21.76% (Q1 2025) . - **Institutional Activity**: - 64 hedge funds held CNC as of Q1 2025 (down from 72 in Q4 2024) . - Recent trades: $335M removed by Wellington Management, $315M added by FMR LLC . #### 4. **Risks to Watch** - **Earnings Miss**: Q2 EPS guidance withdrawal (-90.5% YoY) . - **Regulatory Uncertainty**: Medicaid enrollment declines could hit premium revenues . - **Litigation Costs**: Potential payouts from class action lawsuits . --- ### 📊 **Conclusion** **CNC has a 50-50 chance of reaching $60.71 by year-end**, but success depends on: 1. **Earnings Recovery**: Q2 results must show stabilization in Medicaid margins. 2. **Regulatory Relief**: OBBBA implementation delays or favorable state contracts. 3. **Legal Resolution**: Class action lawsuits must not lead to significant payouts. **Final Takeaway**: CNC is a **high-risk, high-reward** play with upside potential but significant execution risks. For a **moderate-risk portfolio**, consider waiting for clearer catalysts before entering. |code|Ticker|Name|Date|Pre-Market Percentage Change|market_code| |---|---|---|---|---|---| |CNC|CNC.N|Centene|20250724|-2.7532290958531687|169| |code|Ticker|Name|Date|Post-Market Percentage Change|market_code| |---|---|---|---|---|---| |CNC|CNC.N|Centene|20250724|1.3445440956651713|169|