BofA downgrades Centene as new bill threatens Medicaid and ACA growth
BofA Global Research downgrades health insurer Centene CNC.N to "underperform" from "neutral", trims PT to $30 from $52
Medicaid and Affordable Care Act (ACA) exchange markets are slowing due to the new Reconciliation Bill, and there's a strong chance that enhanced government subsidies for ACA coverage will expire after 2025, BofA analysts say
Brokerage expects at least $2.75 per share of pressure from the ACA exchanges, plus higher costs in Medicaid
Membership declines driven by the new legislation are expected to slow CNC’s revenue growth through 2029, while shifting insurance risks and potential Medicaid rate cuts will make it more difficult for the company to restore normal profit margins, BofA analysts say
As of last close, CNC stock down 50.5% YTD
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