Centene Corporation CNC is reshaping its Medicare Advantage (“MA”) business by simplifying its plan footprint and placing greater emphasis on dual-eligible members. The strategy aims to improve the quality of its MA portfolio while better aligning resources with markets and member groups where CNCCNC-- has an established healthcare presence.
The broader Medicare segment also showed improving economics. The segment’s health benefits ratio improved to 89.5% in the second quarter of 2026 from 90.9% a year ago, reflecting fundamental outperformance in both Medicare Advantage and PDP, along with favorable Medicare programmatic items and the absence of a 2026 premium deficiency reserve for MA. MA, which accounts for more than 40% of Medicare segment revenues in the second quarter of 2026, is moving closer to breakeven for full-year 2026. D-SNP members now account for about 40% of CNC’s MA portfolio.
For 2027, CenteneCNC-- plans to further simplify its MA footprint and focus its benefits on dual-eligible members, using its Medicaid experience to support more integrated care. This targeted approach could also reduce complexity and improve operating efficiency across the business.
The margin recovery path still depends on medical-cost control and Stars execution. Medical costs remain elevated versus historical levels, while changes in Stars methodology and higher cut points could pressure reimbursement. Even so, portfolio optimization, SG&A management and a greater focus on duals could support CNC’s target of achieving breakeven or better Medicare Advantage results in 2027, followed by further margin improvement.
How Are Competitors Faring?
Some of CNC’s major competitors in the healthcare service provider space are UnitedHealth Group Incorporated UNH and Elevance Health, Inc. ELV.
UnitedHealth Group is prioritizing Medicare Advantage margin recovery over membership growth, using repricing, benefit redesign and market exits to counter elevated medical costs and funding pressure. UNH’s medical care ratio improved to 86.7% in the second quarter of 2026 from 89.4% a year ago.
Elevance Health is taking a more selective approach to Medicare Advantage, accepting membership declines while repositioning the business for sustainable returns. Higher medical costs remain a pressure point, though pricing discipline and Carelon-led cost management could strengthen future profitability.
Centene’s Price Performance, Valuation & Estimates
Shares of CNC have surged 59% in the year-to-date period compared with the industry’s growth of 20.3%.
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From a valuation standpoint, Centene trades at a forward price-to-earnings ratio of 12.57, below the industry average of 15.80. CNC carries a Value Score of A.
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The Zacks Consensus Estimate for Centene’s 2026 earnings is pegged at $4.89 per share, implying 135.1% growth from the year-ago period.
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CNC stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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