Morgan Stanley Foresees Solid Growth for Centene Next Year

In a report published Monday, Morgan Stanley analyst Andrew Schenker reiterated an Equal-Weight rating on Centene Corp. (NYSE: CNC).

In the report, Morgan Stanley noted, “Initial guidance range reflects ~29% top-line growth next year. CNC's 2014 outlook of $3.50 to $3.80 reflects 1) <65k expansion lives, 2) 70-140k exchange lives, 3) new contracts in Florida and Texas, and 4) $0.50 to $0.55 of business expansion costs. Notably, the company excluded any impact from the ACA insurer fee from its guidance. We have slightly updated our 2014E EPS to $3.54, which assumes 95% pass through of the fee and the non-tax deductibility. If all states reimburse CNC for 100% of the fee and the non-tax deductibility, our EPS forecast would lift to $3.65 next year.”

Centene Corp. closed on Friday at $57.58.