NEW YORK (TheStreet) -- Centene (CNC) shares are down 0.73% to $102.19 in early market trading on Tuesday despite the low income healthcare service provider receiving a price target and EPS estimate boost from analysts at Cantor Fitzgerald today.
Analysts at the firm raised the company's price target to $125 from $108 and raised its 2015 diluted EPS estimates to $5.25 from $5 in a note released before the opening bell today.
"CNC's initial guidance for 2015 is significantly higher than prior consensus (FactSet), principally because of higher enrollment and a lower MLR. It's not clear that investors will give CNC much credit for the better loss ratio until it starts posting good numbers next year, but management's growing confidence is a good sign," said analysts at the firm.
TheStreet Ratings team rates CENTENE CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate CENTENE CORP (CNC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CNC's very impressive revenue growth greatly exceeded the industry average of 19.8%. Since the same quarter one year prior, revenues leaped by 55.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 50.56% and other important driving factors, this stock has surged by 77.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- CENTENE CORP reported significant earnings per share improvement 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 $2.85 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($4.40 versus $2.85).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 67.3% when compared to the same quarter one year prior, rising from $49.37 million to $82.62 million.
- Net operating cash flow has significantly increased by 237.98% to $441.85 million when compared to the same quarter last year. In addition, CENTENE CORP has also vastly surpassed the industry average cash flow growth rate of -20.16%.
- You can view the full analysis from the report here: CNC Ratings Report