Centene (CNC) Investor Day 2024 summary

Strategic direction and growth opportunities

• 2025 adjusted EPS guidance is set above $7.25, representing over 6% year-over-year growth, with a long-term EPS CAGR target of 12%-15%.

• Focus is on three core businesses—Medicaid, Medicare, and Marketplace—while highlighting disruptive growth in Duals alignment and ICHRA.

• Medicaid remains the core, with presence in 30 states and 2,098 counties, and ongoing growth in managed care and complex populations.

• Marketplace leadership is reinforced by 4.5 million members and over $30 billion in projected 2025 revenue, with a sustainable pre-tax margin target of 5%-7.5%.

• ICHRA market entry is underway, with new plans launched in six states and partnerships to access over 500,000 employer groups.

Financial guidance and embedded earnings

• 2025 premium and service revenue guidance is $154.0–$156.0 billion, up from $143.5–$144.5 billion in 2024.

• Medicaid expected to represent 55% of 2025 revenue, with a 3%-4% average net rate increase and ongoing rate recapture efforts.

• Medicare segment targets break-even by 2027, with margin improvement driven by SG&A reductions and operational efficiencies.

• PDP business projected at $14.5 billion in 2025 revenue, with a path to increase pre-tax margins from 1% to at least 3%.

• Embedded earnings power identified in Medicaid margin normalization, Medicare turnaround, and PDP margin expansion, with scenario planning for potential eAPTC subsidy changes.

Policy and market environment

• Political landscape remains divided but bipartisan support for Medicaid and Marketplace stability is strong, with enhanced APTCs likely to see some form of extension.

• Ten states have not expanded Medicaid, representing a $2.65B opportunity if expansion occurs.

• Medicare Advantage outlook includes more favorable rates and Star ratings, with a focus on duals integration and drug pricing innovation.

• Marketplace growth is supported by eAPTCs, with contingency plans for subsidy expiration, including dual rate filings and pricing adjustments.

• M&A remains a strategic option, with a focus on core business expansion and capabilities that accelerate disruptive opportunities.