Quick Take: CNC 2Q26 - Solid performance on MLR recovery; large beat and raise Marketplace risk adjustment

研报英文原文证据摘录

Quick Take: CNC 2Q26 - Solid performance on MLR recovery; large beat and raise Marketplace risk adjustment

NSTEIN FLASHMAIL

28 July 2026

Lance Wilkes

+1 917 344 8501

U.S. Healthcare Services lance.wilkes@bernsteinsg.com

Centene Corp Adam Chow

+1 212 845 7820

Rating adam.chow@bernsteinsg.com

Outperform Kevin Peterson

Price Target +1 917 344 8358

kevin.peterson@bernsteinsg.com

CNC 68.00 USD

Quick Take: CNC 2Q26 - Solid performance on MLR recovery; large

beat and raise Marketplace risk adjustment

CNC reported 2Q26 earnings with adj EPS of $2.51, $1.44 above consensus of $1.07 (~134% beat). MLR came in at 89.6%,

~173 bps lower than consensus (91.3%).

Our take - This was a solid quarter of progress in margin recovery, coupled with a step up in risk adjustment recovery in Marketplace

which reflects recovery in the earnings base and is sustainable. Medicaid outperforming our expectations for the quarter (MLR at

93.9% vs ~95% expectation) is likely driven by normalizing cost trends and acuity, coupled with improved cost management programs

and modestly improving rate environment. Marketplace strong outperformance was driven by risk adjustment update, but adj MLR

of ~84% is inline with our expectation which was for an improvement of 300-350 bps in margin for FY26. Medicare still performing

solidly, although some of the outperformance in qtr relative to our expectations is likely due to prior year adjustments.

We see this as raising the floor on earnings, which should lead investors to raise base earnings expectations and drive EPS revisions

and strong price movement today. The focus will then shift to pace and conviction of recovery in Medicaid and Marketplace for 2027

and beyond. Press release commentary on areas of progress in Medicaid are favorable in this regard as well.