Morgan Stanley sees Centene pullback on Trump ACA order as buying opportunity
As previously reported, Morgan Stanley analyst Zack Sopcak said he views today's weakness in Centene shares following President Trump's executive order to cut off ACA subsidy payments as a buying opportunity, highlighting three reasons that the move lower is particularly "exaggerated." First, New York AG Eric Schneiderman has said his state and a coalition of other, including California, plan to sue if subsidies were cut off, so the legal fight may delay the impact. Second, Centene has previously said it submitted two bids in most markets; one assuming Cost Sharing Reduction, or CSR, payments, one without. Third, following its pending Fidelis acquisition, he estimates total Centene exposure to exchanges to be about 8%, with roughly 60% of those receiving CSRs. Sopcak reiterate his Overweight rating and $103 price target on Centene, which is down 6% to $88 per share near midday.