Centene Shares Plunge 23% After Withdrawing 2025 Guidance Due to Lower Marketplace Growth

Centene Corporation's stock plunged by up to 28% after the managed-care giant withdrew its 2025 earnings guidance, citing unexpected challenges in ACA Exchange risk adjustment calculations and higher-than-anticipated Medicaid costs. Preliminary data showed that market growth and morbidity were worse than the company’s prior assumptions, resulting in an estimated $1.8 billion reduction in expected revenue and a $2.75 hit to adjusted EPS, erasing about 38% of previous guidance. This negative development comes amid broader sector concerns, as other insurers like UnitedHealth and CVS Health’s Aetna have also faced rising medical costs and leadership shakeups. Centene’s Medicare Advantage and Prescription Drug Plan businesses are performing better than expected, providing some offset. The company plans to refile 2026 ACA Exchange rates and will offer more details during its upcoming earnings report. Analysts have lowered earnings estimates, but some maintain positive outlooks due to Centene's overall financial health and potential cost-mitigation strategies.