Bank of America downgraded Centene Corporation's stock to 'Underperform' from 'Neutral' and reduced its price target to $30 from $52 per share. The downgrade is attributed to concerns related to the recently enacted One Big Beautiful Bill Act (OBBBA).
Analysts cited worries that the passage of the OBBBA could significantly impact Centene's operations and financial performance. This policy change is expected to introduce work requirements and more frequent eligibility redeterminations in Medicaid, potentially increasing morbidity among members.
This substantial revision in rating and price target from a major analyst firm underscores the market's apprehension about the legislative landscape and its direct implications for Centene's government-sponsored programs. The OBBBA's effects are seen as a new challenge for the company.
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