- Centene (CNC +12.4%) is riding high after Joe Biden's performance on Super Tuesday sets him up as the betting favorite to take on Donald Trump in the fall.
- Wells Fargo is looking beyond the political drama to weigh in on a couple of other developments to watch with Centene. First, WF warns that a rate cut in New York could cut into Centene's CNC earnings by $150M. "The rate cut would be retroactive to January 1 and about half of the $200 million is tied to CNC’s quality bonus, as the state is proposing ending the quality bonus program. While not yet finalized, CNC has already started to identify offsets ($50 million identified thus far in corporate) and develop initiatives to mitigate the impact," updates the firm.
- Wells also has its eyes on the coronavirus outbreak in the U.S. The analysts team says that while the potential impact from COVID-19 on Centene remains uncertain, it reminds that a large portion of CNC's membership (~94%) is likely young enough to be considered in the lower risk categories or COVID-19.
- Wells Fargo keeps an Outperform rating on Centene after factoring in the latest developments.