Molina Healthcare (MOH) has a clear path to earnings growth through 2027, supported by the reversal of Florida CMS startup costs, the exit from Medicare Advantage Prescription Drug plans and operating leverage from about $6 billion of new revenue, RBC Capital said in a Tuesday note.

The analyst said management expects at least $4.50 per share in embedded 2027 earnings and RBC's 2027 adjusted EPS estimate of $9.60 is broadly in line with the company's outlook.

At its 2026 Investor Day, Molina projected adjusted EPS of $25 and premium revenue of $64 billion by 2029, with upside to $30 per share if medical costs ease and rates improve more quickly, and downside to $20 per share if cost pressures persist, according to the report.

The firm said achieving the 2029 target hinges largely on Medicaid rate recovery, with about $7.25 per share of expected earnings growth assuming improved reimbursement rates and a 5% medical cost trend.

RBC initiated coverage of the stock with a sector perform rating and a price target of $216.

Molina Healthcare shares were down 1.8% in Tuesday trading.

Price: 193.82, Change: -3.60, Percent Change: -1.82