Street Calls of the Week
Investing.com - Barclays downgraded Molina Healthcare (NYSE:MOH) from Equalweight to Underweight on Thursday, slashing its price target to $144.00 from $185.00. According to InvestingPro data, the healthcare provider currently trades at a P/E ratio of 12.01 and shows signs of undervaluation based on its Fair Value analysis.
The downgrade follows Molina’s disappointing third-quarter results, which triggered a 17% stock selloff on Thursday while the S&P 500 gained 0.6%.
Barclays expressed skepticism about Molina’s preliminary 2026 earnings per share forecast of $14, calling it "too optimistic" and based on an assumption that Medicaid medical loss ratio will remain flat year-over-year.
The investment bank views increasing Medicaid pressure in the second half as a "clear negative development" for 2026 and more conservatively models the medical loss ratio increasing by 50 basis points year-over-year, putting its 2026 EPS estimate at $11, or 21% below Molina’s preliminary view.
In a bear scenario outlined by Barclays, Medicaid margins could compress by 100 basis points year-over-year, which would place the EPS estimate closer to $8.50.
In other recent news, Molina Healthcare reported its third-quarter 2025 financial results, revealing a mixed performance. The company achieved revenue of $11.48 billion, surpassing the anticipated $10.94 billion by 4.94%. However, the earnings per share (EPS) fell short of expectations, coming in at $1.84 compared to the forecasted $3.91, marking a 52.94% miss. This discrepancy between revenue and EPS has raised concerns among investors. Despite the revenue beat, the significant EPS miss has impacted investor sentiment. There was no mention of any mergers or acquisitions in the recent updates. Additionally, there were no reports of analyst upgrades or downgrades for Molina Healthcare. These developments highlight the company’s current financial challenges and investor reactions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.