BofA Securities upgrades Elevance, Centene, and Molina Healthcare on Medicaid margin outlook
Updated
Updated · Barron's · Apr 29
BofA Securities upgrades Elevance, Centene, and Molina Healthcare on Medicaid margin outlook
8 articles · Updated · Barron's · Apr 29
Elevance Health is upgraded to Buy, while Centene and Molina Healthcare receive double-upgrades to Buy from Sell, reflecting BofA’s view that Medicaid margins will bottom in 2026.
BofA expects rates to catch up in 2027, projecting above-average earnings growth for managed-care organizations through 2029, with Centene and Molina likely to see significant upside in the next three years.
Despite near-term risks and volatility, all three stocks are up for the year, buoyed by a favorable Medicare Advantage rate decision and expectations of improved clarity on cost trends by the second quarter.
With Medicare Advantage rates improving, could new Medicaid work requirements derail the sector's overall recovery?
What specific cost trends must appear in Q2 reports to confirm the predicted managed-care profit turnaround is real?
Why does BofA predict a profit boom for MCOs while McKinsey forecasts billions in losses for the same period?
Can state-level rate adjustments truly offset the financial impact of new federal policies on Medicaid managed care?
Beyond waiting for states, how can technology help MCOs bridge the data gap suppressing their profit margins?