Molina Healthcare missed Q4 adjusted EPS estimates

Overview

• Healthcare provider's Q4 adjusted EPS missed analyst expectations

• Company's full year premium revenue rose 11% yr/yr, driven by acquisitions and rate increases

• Company issued 2026 guidance with premium revenue expected to decline slightly

Outlook

• Molina Healthcare expects full-year 2026 premium revenue of approximately $42 bln

• Company anticipates full-year 2026 adjusted EPS of at least $5.00

• Molina Healthcare plans to exit Medicare Advantage Part D in 2027

Result Drivers

• RETROACTIVE REVENUE ADJUSTMENTS - Q4 results were burdened by $2.00 per share of unfavorable retroactive premium adjustments, particularly in the Medicaid business in California

• HIGH MEDICAL COSTS - Continued high levels of utilization in Medicaid and Medicare increased medical costs, impacting the medical care ratio

• ACQUISITIONS AND RATE INCREASES - Full-year premium revenue rose 11% due to recent acquisitions, rate increases, and organic growth

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 14 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the managed healthcare peer group is "buy."

• Wall Street's median 12-month price target for Molina Healthcare Inc is $172.00, about 3.4% below its February 4 closing price of $178.04

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nBw2p7cBsa

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