Centene (CNC) shares are positioned to continue trading at "attractive levels" even with looming Medicaid cuts and expiring enhanced Advanced Premium Tax Credits or eAPTCs, Oppenheimer said in a Friday note.
House Republicans recently released a budget resolution that targets $880 billion in federal spending cuts, potentially affecting Medicaid, according to the note. Proposed provisions include per-capita caps and funding cuts for Medicaid expansion, but Oppenheimer noted that it will be difficult to implement some of the large-scale provisions.
And while the tax credits are set to expire at year-end, Oppenheimer said Republicans could consider a compromise as the expiry would lead to higher uninsured and Medicaid population in several Republican states.
"Even if we remove the most draconian impacts for the eAPTCs and the Medicaid cuts, the stock would be trading at attractive levels," Oppenheimer said.
Oppenheimer has an outperform rating on Centene stock, with an $85 price target.
Price: 56.22, Change: -0.64, Percent Change: -1.13
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