Centene Offers In-Line 2023 Guidance, Strong Long-Term Goals at Investor Day; No FVE Change

Narrow-moat Centene maintained its 2022 outlook and revealed its initial guidance for 2023 that appears to be in line with our bottom-line expectations. After this announcement, we are maintaining our $95 fair value estimate. With the shares trading at just 13 times 2023 expected earnings, we view Centene as moderately undervalued, especially considering its new long-term earnings growth goal of 12%-15%, which roughly matches our intermediate-term view. That new earnings growth target also puts Centene in the mix with top-tier managed-care companies like UnitedHealth (13%-16% long-term earnings growth goal), Elevance Health (12%-15%), and Humana (11%-15%) in terms of growth prospects, which would be impressive if achieved.