Will Centene Stock Rebound To Its Pre-Inflation Shock Highs?

Centene stock (NYSE: CNC) currently trades at $66 per share, roughly 5% above its level in March 2021, and it has the potential for sizable gains. CNC saw its stock trading at around $85 in late June 2022, just before the Fed started increasing rates, and is now 22% below that level. The stock has lost 15% since September 2022 compared to the S&P 500, which gained about 21% during this period. CNC stock was performing well earlier this month, rising 12% from levels toward the end of May to June 13, before seeing a sharp decline on June 14, primarily due to UnitedHealth’s management stating that there is a rise in medical costs as more people are getting elective procedures done that were earlier postponed during the pandemic. This has impacted health insurance stocks at large.

Returning to the pre-inflation shock level means that CNC stock will have to gain 47% from here. While this may not happen anytime soon, CNC stock looks attractive from a valuation perspective and can see higher levels. It is trading at 0.3x trailing revenues, compared to its last five-year average of a little over 0.5x. Our Centene Valuation Ratios Comparison dashboard has more details.