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Investing.com - TD Cowen has reduced its price target on Molina Healthcare (NYSE:MOH) to $283.00 from $369.00 while maintaining a Buy rating on the stock. The healthcare provider, currently trading at a P/E ratio of 10.4x with a market capitalization of $9.9 billion, appears undervalued according to InvestingPro analysis.
The firm lowered its estimates following Molina’s pre-announced second-quarter 2025 earnings results, which revealed elevated medical utilization across all three of the company’s business lines expected to continue through the remainder of the year. Despite recent challenges, the company maintains strong financial health with an "GREAT" overall score from InvestingPro.
TD Cowen adjusted its second-quarter 2025 earnings per share estimate down from $6.23 to $5.50 and reduced its full-year 2025 EPS forecast from $24.45 to $21.68. The firm’s consolidated medical loss ratio estimate increased to 89.5% from a previous 89.0%.
Looking further ahead, TD Cowen also lowered its 2026 EPS estimate to $24.76 from $28.38, which still represents 14% year-over-year earnings growth and a 30 basis point improvement in the medical loss ratio compared to 2025.
Despite the price target reduction, TD Cowen maintained its Buy rating on Molina Healthcare, while acknowledging that some investors may exercise caution due to the company’s higher exposure to Medicaid and Health Insurance Exchange markets. With revenue growth of 16.2% and trading near its 52-week low, InvestingPro offers additional insights through its comprehensive Pro Research Report, available along with 14 key ProTips for this healthcare provider.
In other recent news, Molina Healthcare has adjusted its financial outlook, citing rising medical costs across its business segments. The company has lowered its full-year 2025 earnings per share guidance to a range of $21.50 to $22.50, down from a previous forecast of over $24.50. This adjustment follows a pre-announcement of second-quarter earnings of $5.50 per share, which fell short of consensus estimates of $6.20. The changes are attributed to a temporary dislocation between premium rates and medical cost trends, particularly affecting Medicaid, the Health Insurance Exchange, and Medicare.
Wolfe Research maintained its Peerperform rating on Molina Healthcare, while Morgan Stanley (NYSE:MS) downgraded the company from Overweight to Equalweight, citing increased healthcare utilization. UBS and Barclays (LON:BARC) also lowered their price targets for Molina Healthcare to $260 and $270, respectively, due to ongoing cost pressures. Morgan Stanley now projects Molina’s full-year 2025 EPS at $22.06, slightly above the midpoint of the company’s updated guidance. The company anticipates these cost pressures to persist through the second half of 2025, impacting its Medicaid, Medicare, and marketplace segments.
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