Morgan Stanley analyst Zack Sopcak said investor concerns about Molina Healthcare's 2019 topline growth are missing the significant upside to earnings power that he sees from an incremental $350M in cost cutting beyond 2019, RFP opportunities in Medicaid and the opportunity to expand its exchange footprint. Sopcak, who thinks the company's investor day meeting in late May could bring topline opportunities into greater focus, views the 5% pullback in Molina shares as a buying opportunity and keeps an Overweight rating and $192 price target on the stock.

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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