10 Best Health Insurance Stocks to Buy

7. Centene Corporation (NYSE:CNC)

Number of Hedge Fund Holders: 48

Centene Corporation (NYSE:CNC), headquartered in St. Louis, Missouri, is a publicly traded managed care company that serves as an intermediary for both government-sponsored and privately insured healthcare programs, with a primary focus on the Medicaid market.

Wells Fargo recently updated its outlook on Centene Corporation (NYSE:CNC), raising the price target from $81 to $93 while maintaining its Overweight rating, signaling confidence in the stock’s investment potential. The revised price target is based on Wells Fargo’s analysis of two possible earnings scenarios for CNC. In the first scenario, assuming the continuation of enhanced exchange subsidies, the firm applied a 13x multiple to Centene’s projected 2026 earnings per share. In the second scenario, should the enhanced subsidies expire, Wells Fargo anticipates a $0.70 EPS headwind, which would be partially offset by $2.00 per share in statutory capital.

Centene Corporation (NYSE:CNC) posted strong results for the second quarter, reporting an adjusted diluted EPS of $2.42, a 15% year-over-year increase. This solid performance was primarily driven by effective marketplace execution, despite challenges in Medicaid due to redeterminations. Looking ahead, the health insurer has raised its full-year premium and service revenue expectations to a range of $141 billion to $143 billion. Additionally, the company is targeting 2025 revenue between $14 billion and $16 billion, focusing on opportunities in duals, Heidi, and Fidei programs.

As of Q2 2024, 48 hedge funds tracked by Insider Monkey held stakes in Centene Corporation (NYSE:CNC). Among the top investors, AQR Capital Management owned a stake valued at over $296.4 million.