Leerink analyst Ana Gupte continues to have "strong conviction" on Molina Healthcare and reiterates an Outperform rating and a $80 price target after the company's announcement from its interim CEO and CFO Joseph White on the elimination of 1,400 jobs, or 10% of its corporate and health plan workforce. The analyst estimates this could expand margins by over 50 bps or offer 50% net margin expansion and get the company by the end of September to the low end of the stated target of 1.5%-2% net margins.

The company states: "The consolidated MCR for the first quarter of 2024 was 88.5%, reflecting changes in member mix due to growth across all segments and continued, strong medical cost management, and is in line with the Company's expectation. The Medicaid MCR for the first quarter of 2024 was 89.7%, in line with the Company's expectation and normal quarter to quarter trend fluctuations within our guidance. The new store additions in California and Nebraska, as well as Iowa and the My Choice Wisconsin acquisition in late-2023, drove a higher reported MCR in the first quarter of 2024. The Medicare MCR for the first quarter of 2024 was 88.7%, in line with the Company's expectations. Utilization in the legacy portfolio was consistent with the second half of 2023, but was offset by operational improvements and benefit adjustments."

Reports Q1 revenue $9.93B, consensus $9.44B. "We are very pleased with our first quarter performance," said Joseph Zubretsky, CEO. "We delivered strong financial performance supported by excellent operating metrics across our business, while sustaining profitable growth consistent with our long-term targets."

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