CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our 12-month target price by $1 to $76, reflecting an 11.4x multiple of our 2024 EPS estimate (down by $0.02 to $6.68), a small discount to CNC’s five-year forward average of 11.8x. We raise our 2023 EPS forecast by $0.09 to $6.60. CNC reported Q3 adjusted EPS of $2.00 vs. $1.30, far above the $1.52 consensus forecast. Revenue of $38.0B rose 6.1% Y/Y, with the Marketplace business rising to over 3.6M members vs. 2.1M as of the prior-year quarter. The health benefits ratio (HBR) of 87.0% was in line with Q2 and down from 88.3% in Q3 2022, reflecting Marketplace growth (a lower HBR segment). With ongoing effects from redetermination, total Medicaid membership fell 2.9% Y/Y, though CNC left its guidance unchanged for a 10%-15% recapture of membership (200K-300K members). CNC expects a slight earnings boost next year from the $1.2B divestiture of U.K.-based Circle Health, which the company expects to close in Q1 2024.