Jefferies has adjusted its valuation outlook for Molina Healthcare (NYSE:MOH), reducing its price target from $160.00 to $139.00 while retaining a Hold rating. The revised target is positioned marginally above Molina’s most recent trade price of $131.72. The stock has experienced severe volatility, sliding 27.3% over the last week.
The investment firm pointed to pressure on Molina’s Medicaid medical loss ratio (MLR) in the fourth quarter of 2026 as a primary concern. Jefferies highlighted the effect of the Florida Centers for Medicare & Medicaid Services (CMS) contract on that MLR outlook.
In its analysis, Jefferies projects that Molina’s earnings per share will decline on a year-over-year basis in 2027. The firm nonetheless expects the decline to be smaller than previously estimated, conditional on the Florida contract maturing and potentially contributing to an improvement in performance.
Despite those moderating assumptions, the research note warns of downside risk to Molina’s Medicaid guidance for 2026. Jefferies retained assumptions that both the underlying rate and trend would rise at 4% and 5%, respectively, yet still flagged the potential for guidance to come under pressure.
Jefferies also called attention to Molina’s Health Insurance Exchange (HIX) membership, characterizing it as "getting diminishingly small." The firm advised that investors who are considering a purchase would likely need either a multi-year investment horizon stretching into 2028 and beyond or assurance that certain policy dynamics will not prevent Medicaid MLR improvement in 2027.
Separately, Molina reported notable fourth-quarter 2025 results that have drawn market attention. The company disclosed an adjusted loss per share of $2.75 for the quarter, markedly below the consensus projection of earnings per share of $0.34. Revenue for the period, however, topped expectations at $11.38 billion.
In addition to the operating results, Molina said it will record an estimated, non-cash, pre-tax impairment charge of about $93 million in the first quarter of 2026. The company tied this impairment to its decision to exit the Medicare Advantage Prescription Drug product for 2027. Molina specified that the charge will be recorded outside of adjusted net income in the company’s earnings release.
These developments accompany a strategic shift described by the company toward focusing on dual eligible members. The combination of the lowered price target, flagged Medicaid MLR risk tied to the Florida CMS contract, recent earnings shortfall, and the planned impairment have contributed to analyst and investor scrutiny.
Summary
Jefferies cut its Molina Healthcare price target to $139 from $160 and kept a Hold rating, citing Medicaid MLR concerns for late 2026 related to the Florida CMS contract. The firm still expects 2027 EPS to decline year-over-year but to a lesser degree as the Florida contract matures. Molina reported a Q4 2025 adjusted loss per share of $2.75 versus expected EPS of $0.34, revenue of $11.38 billion, and plans a roughly $93 million pre-tax impairment in Q1 2026 tied to exiting a Medicare Advantage Prescription Drug product for 2027.