The rationale for the stock move was that Biden may be able to stop Bernie Sanders and his Medicare for All plan from gaining the nomination.
After primary wins Tuesday in Alabama, Arkansas, Massachusetts, Minnesota, North Carolina, Oklahoma, Tennessee, Texas and Virginia, Sanders won the primary in California, the biggest delegate state, as well as in Colorado, Utah and his home state of Vermont. Biden so far leads Sanders in delegates by 467 to 392, Associated Press data show.
While Sanders seeks a health-care plan that is completely government-run, Biden supports continuation of the Affordable Care Act, known as Obamacare.
So Biden’s strength is good for Centene, which focuses on government-backed plans, says Citigroup analyst Ralph Giacobbe.
"We view the Democratic Party coalescing and providing some momentum around Biden as disproportionately favorable to CNC, given Biden's approach to building on [the Affordable Care Act] and CNC's success in the market," he wrote in a report, according to Dow Jones.
The strength of Centene’s stock Wednesday came despite some downbeat news in the company’s earnings report Tuesday.
It forecast adjusted profit of $4.56 to $4.76 a share for fiscal 2020, down from its prior estimate of $4.64 to $4.84. Analysts expected $4.82, according to Refinitiv.
Centene said a Medicaid rate cut in New York State could lower adjusted profit by 17 cents a share in the year.
It predicts revenue of $104.8 billion to $105.6 billion for the year, compared to analysts’ projection of $106.8 billion.
At last check, Centene shares traded at $60.52, up 12%. The stock has slumped and surged in the past two weeks. It closed at $67.37 on Feb. 19, dropped 22% in six sessions, then leaped 15% through midday Wednesday.