Molina Healthcare, among the highest-rated stocks in the top-tier managed care group, topped Q3 earnings estimates and bumped up full-year guidance after Wednesday's close. In after-hours action, MOH stock climbed further within a buy range, following Monday's breakout.
Molina Healthcare Earnings
Estimates: Analysts expect Molina earnings per share of $4.22, up 49% from a year earlier. Revenue is seen growing 11% to $7.8 billion.
Results: Molina earned $4.36 on revenue of $7.927 billion. The Medical Care Ratio came in at 88.4% vs. 88.9% a year ago. Medical membership grew 337,000 from a year ago to 5.2 million.
Outlook: Molina raised full-year guidance for earnings to at least $17.75 a share from at least $17.60 a share. Analysts currently expect $17.72. Guidance for premium revenue rose to $30.5 billion from $30 billion.
The managed care group, which offers a degree of protection against both inflation and recession, is ranked No. 18 of 197 industry groups based on price performance and momentum. Molina, a leading Medicaid managed care provider, has momentum from recent contract wins in California, Iowa and Nebraska.
In an Oct. 3 note, JPMorgan analyst Calvin Sternick started coverage of MOH stock with an overweight rating and 360 price target. He noted that those contract awards could "significantly de-risk" Molina's $42 billion revenue target for 2025.
However, the Medicaid outlook isn't all positive. The Biden administration recently extended the Covid public health emergency through January. But if that's the last extension, it could kick off a yearlong process by states to determine whether Medicaid beneficiaries — whose ranks are up by about 18 million since the pandemic began — still qualify based on their economic circumstances.
The Kaiser Family Foundation estimates that 5 million to 14 million Medicaid beneficiaries will lose their benefits once the public health emergency ends.
Molina Healthcare also participates in Medicare Advantage and the state insurance exchanges for purchasing individual coverage.
MOH stock rose 0.7% to 371.63 in late Wednesday stock market action. That followed a 0.8% gain in the regular session. On Monday, MOH stock cleared a 361.35 buy point from a six-week flat base, according to a MarketSmith analysis. The buy zone runs to 379.42.
Helped by its Medicaid contract wins and the Biden administration's decision to defer Medicaid redeterminations, MOH stock has gone on a massive 48% run since mid-June. Still, MOH doesn't appear too extended at the moment, since it's within 8% of its 50-day moving average.
Meanwhile, Elevance Health rose 1.8% to 533.57 on Wednesda. ELV stock crested a 533.78 buy point from a 28-week consolidation, but closed just below it. Still, Elevance stock looks extended from the 50-day line.
UnitedHealth rose 0.6% to 543.17. UNH stock is nearing a 553.23 cup-with-handle buy point.
Humana and Cigna report next week. HUM stock rose 1.8% and Cigna 1.3%. Both are slightly extended from recent buy points.