Cantor Fitzgerald has kept its Neutral rating on Centene (CNC) and retained a $41.00 price target, citing an uncertain 2026 operating backdrop for two of the company’s core businesses: Medicaid and the individual Marketplace. The research note emphasized underwriting challenges for the coming year even while describing Centene as "an effective operator" across those businesses.
The firm pointed to two market dynamics that weigh on near-term visibility: "rates lagging acuity in Medicaid" and "metal shifts in Marketplace." According to Cantor Fitzgerald, those forces make it difficult to justify added exposure to Medicare and Marketplace risk ahead of 2026.
Market data referenced in the firm’s assessment show Centene trading at $38.46, a level Cantor Fitzgerald regards as significantly below what investing models classify as the company’s Fair Value. The stock has also experienced notable volatility recently, losing roughly 10.14% over the past week as investor sentiment adjusted to the outlook.
Operational metrics highlighted by the firm illustrate the near-term pressure on Centene’s profitability. Over the last twelve months the company reported a gross profit margin of 10.47% and negative earnings per share of -$13.53. Those figures underpin the cautious stance taken on the 2026 operating environment.
Despite the short-term reservations, Cantor Fitzgerald retained a constructive long-term view on Centene’s potential. The firm suggested that, over a two- to three-year horizon, the stock could produce returns in excess of 200% under the right conditions. That optimism is built on the belief that the sector is currently in a "pricing cycle" and that "payors are not broken," implying that structural market dynamics could eventually reassert more favorable economics for managed care operators.
Centene’s most recent results provide mixed signals that reflect these competing forces. The company reported fourth-quarter 2025 adjusted diluted loss per share of $1.19, narrowly better than the expected $1.22 loss. Revenue for the quarter came in at $49.73 billion, topping the $48.39 billion consensus. Nevertheless, those beats did not translate into positive market reaction; Centene’s shares moved lower in pre-market trading following the release.
The muted market response underscores investor concern about the company’s path forward and potential strategic adjustments that management might need to consider. While the headline earnings and revenue numbers exceeded expectations, the deeper profitability metrics and the forward-looking remarks from Cantor Fitzgerald point to uncertainty that market participants are pricing into the stock.
The firm’s combination of short-term caution and longer-term optimism leaves Centene in a holding pattern: operational performance and evolving market conditions will likely determine whether Centene can close the gap between current trading levels and the upside potential Cantor Fitzgerald envisions.
Key takeaways
- Cantor Fitzgerald reiterates Neutral rating and $41.00 price target on Centene, citing a difficult underwriting environment for Medicaid and Marketplace in 2026.
- Centene reported Q4 2025 adjusted diluted loss per share of $1.19 and revenue of $49.73 billion, both marginally better than expectations, yet the stock fell in pre-market trading.
- Longer-term upside remains possible according to the firm, which cited a pricing cycle and the belief that payors remain fundamentally intact, suggesting potential for multi-year recovery.
Sectors affected - Healthcare, Insurance/Managed Care, Financial Markets.
Risks and uncertainties
- Rates lagging acuity in Medicaid - this dynamic affects Medicaid profitability and the underwriting assumptions for health plans, particularly those with significant Medicaid exposure.
- Metal tier shifts in the Marketplace - changes in enrollee plan selections by metal level could alter risk pools and pricing dynamics for insurers operating in individual exchanges.
- Weak margin and negative trailing EPS - Centene’s gross profit margin of 10.47% and trailing EPS of -$13.53 highlight near-term profit pressure that could affect investor confidence and capital allocation decisions.
The combination of these risks and the company’s recent financial performance explains why Cantor Fitzgerald remains cautious in the near term while still noting potential longer-term upside should market conditions normalize.