Updates shares, adds company comments in paragraph 3 and 9, graphic

By Sneha S K and Sriparna Roy

Feb 6 (Reuters) - Centene CNC.N on Friday forecast 2026 profit above Wall Street expectations, setting itself apart from peers that have warned of persistent pressure from elevated medical costs.

The insurer aims to return to profit growth this year after two turbulent years in which rising costs in government-backed plans weighed on the industry.

"While 2025 was undeniably challenging, disciplined execution enabled us to close the year slightly ahead of the expectations," said CEO Sarah London.

Analysts said Centene's forecast should alleviate some fears after a dismal outlook from peer Molina Healthcare MOH.N, which had weighed on Centene's stock, although some cautioned Molina's issues may be more company-specific.

Centene fell as much as 12% from the previous session's close and was trading 7% lower in morning trading.

We expect the magnitude of Molina's unfavorable earnings to prevent Centene from moving higher today, said Baird analyst Michael Ha.

Along with high costs due to a mismatch in rates and demand for healthcare, the industry will also be pressured by President Donald Trump's tax and budget bill that will decrease funding for Medicaid plans for low-income Americans.

The expiration of COVID-pandemic-expanded subsidies will also result in a sicker member pool under Obamacare plans, some insurers have said.

With medical costs and trends slightly better than expectations, "we feel good about Q4 fundamentals as we turn the calendar into 2026," said Chief Financial Officer Drew Asher.

Centene sees 2026 medical costs in line with analysts expectations, while revenue forecast was below estimates.

Revenue is expected between $186.5 billion and $190.5 billion, compared to estimates of $193.43 billion. Centene reported 2025 revenue of $194.8 billion.

UnitedHealth UNH.N and Elevance ELV.N have also flagged a revenue decline for next year.

Centene's 2026 adjusted profit per share is projected to exceed $3 per share which is above estimates.

For the quarter, Centene's medical cost ratio of 94.3% came in higher than 89.6% last year, driven partly by a higher number of sicker patients in its Obamacare plans.

It reported smaller-than-expected fourth quarter loss of $1.19 per share compared to estimates of a loss of $1.22 per share.

(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Tasim Zahid)

((Sriparna.Roy@thomsonreuters.com;))