Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Centene Corp (CNC.N)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

Health Benefits Ratio (HBR) (%) 91.9 91.0 91.2 91.1

ACA Membership Growth (%) 26.5 (40.5) (1.5) 0.3

Medicare Membership Growth (%) (9.7) (0.7) (5.0) 2.1

Medicaid Membership Growth (%) (3.7) (8.5) (2.5) (1.4)

Adjusted EPS Growth (%) (70.9) 134.5 10.2 22.7

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Medicaid contract wins RISKS TO UPSIDE FY Dec 2026e

D-SNP offering well positioned ahead of CNC wins new Medicaid contracts

integration efforts Margin turnaround advances through improved Sales / 195,676

Exchange margin performance and market share pricing and Star ratings Revenue 188,497 196,449

helps lead in ICHRA adoption Consolidation of PBM business and future RFP ($, mm) 191,020

generates significant savings

GLOBAL REVENUE EXPOSURE ICHRA opportunity is realized

RISKS TO DOWNSIDE Net income 1,673 2,423

($, mm)

0-10% Europe ex UK Regulatory uncertainty 1,759

0-10% UK Loss of core Medicaid contracts

90-100% North America Delays to correction of state rate-acuity

mismatch EPS

3.38 4.89 Medicaid disenrollment, particularly in the ($)Source: Morgan Stanley Research Estimate 3.52 expansion population, as a result of cutsView explanation of regional hierarchies here

OWNERSHIP POSITIONING Mean Morgan Stanley Estimates

MS ALPHA MODELS Source: Refinitiv, Morgan Stanley Research

Inst. Owners, % Active 46%

2/5 24 Month 3/5 3 Month

BEST Horizon MOST Horizon HF Sector Long/Short Ratio 2.2x

HF Sector Net Exposure 17.5%

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is

the highest favored Quintile and 5 is the least favored Refinitiv; MSPB Content. Includes certain hedge fund

Quintile exposures held with MSPB. Information may be