NEW YORK (TheStreet) --Shares of Centene Corp. (CNC) - Get Report closed up by 0.94% to $65.79 on Wednesday after Cantor Fitzgerald boosted its price target on the stock to $90 from $85 and reiterated its "buy" rating.
The higher price target comes after the firm attended the company's Investor Day and believes that Centene's new management team will improve sentiment toward the stock. Shares have suffered for months over doubts about the company's acquisition of health insurer Health Net (HNT) in July, the firm noted.
"We believe that HNT complements CNC's core Medicaid business, and establishes the company as a leading player in the lower income segment of Medicare Advantage, which because of demographic trends, we regard as one of the most attractive health insurance markets," the firm said in an analyst note.
The St. Louis-based company is a provider of programs and services to government sponsored healthcare programs.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CENTENE CORP as a Buy with a ratings score of B. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, increase in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 33.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- CENTENE CORP has improved earnings per share by 11.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CENTENE CORP increased its bottom line by earning $2.22 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $2.22).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 12.6% when compared to the same quarter one year prior, going from $82.62 million to $93.00 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, CENTENE CORP's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: CNC