Centene slips 2% after higher-than-expected medical costs in Q4

Despite its Q4 results that met expectations, Centene (CNC -1.5%) is lagging the broad market advance in apparent response its higher-than-expected medical benefit ratio (the proportion of health insurance premiums paid out in claims) last quarter, 88.4% compared to consensus of 87.6%.

Cowen’s Charles Rhyee (Outperform/$83) says the miss may heighten concerns with 2020 margins but his group remains positive ahead of the release of consolidated guidance (includes WellCare) on March 3.

Citigroup’s Ralph Giacobbe agrees, adding that Q4’s better-than-expected expenses provided “some offset” to higher medical costs although he will not be surprised if shares remain under pressure until guidance is released.

https://seekingalpha.com/news/3537973-centene-slips-2-after-higher-expected-medical-costs-in-q4