JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Investing.com - Wolfe Research maintained its Peerperform rating on Molina Healthcare (NYSE:MOH), currently trading at $237.22 with a P/E ratio of 11.4, following the company’s downward revision of its full-year 2025 earnings guidance. According to InvestingPro, the company maintains a "GREAT" financial health score despite recent market challenges.
Molina Healthcare released an 8-K earlier this week lowering its fiscal year 2025 earnings per share guidance to $21.50-$22.50 from its previous forecast of over $24.50. The company also pre-announced second-quarter adjusted earnings per share of $5.50, below consensus estimates of approximately $6.20. With the stock trading near its 52-week low and showing oversold conditions, investors can access detailed analysis and 12 additional exclusive insights through InvestingPro’s comprehensive research report.
The healthcare insurer attributed the guidance reduction to a temporary dislocation between premium rates and medical cost trends, which has recently accelerated across all three of its business lines. According to Wolfe Research’s analysis, the dollar impact appears greatest in Medicaid, followed by the Health Insurance Exchange and then Medicare.
In response to the announcement, Wolfe Research analyst Justin Lake lowered his fiscal year 2025 EPS estimate to $21.00 from $24.52 and raised his Medical (TASE:BLWV) Loss Ratio (MLR) estimate by 80 basis points to 89.8% from 89.0%, driven by higher Medicaid and Health Insurance Exchange MLRs.
The research firm also reduced its fiscal year 2026 EPS projection to $24.11 from $28.33 previously and adjusted the MLR forecast to 89.5% from 88.8%.
In other recent news, Molina Healthcare has announced adjustments to its financial outlook due to rising medical costs across its business segments. The company revealed its second-quarter 2025 earnings per share are expected to be approximately $5.50, which falls short of previous expectations and consensus estimates. Consequently, Molina has revised its full-year 2025 earnings guidance to a range of $21.50 to $22.50 per share, down from earlier projections of at least $24.50. This adjustment reflects ongoing cost pressures in its Medicaid, Medicare, and marketplace segments.
In response to these developments, Morgan Stanley (NYSE:MS) downgraded Molina Healthcare from Overweight to Equalweight and lowered its price target to $266, citing increased healthcare utilization. UBS also reduced its price target for Molina to $260, maintaining a Neutral rating, while Barclays (LON:BARC) adjusted its target to $270, also maintaining an Equalweight rating. Both firms highlighted the persistent cost pressures affecting Molina’s financial performance.
Molina’s management attributes the earnings shortfall to a temporary dislocation between premium rates and medical cost trends. The company expects these pressures to continue into the latter half of 2025. Additionally, Barclays noted that recent CMS risk adjustment data could further impact Molina’s financial results. Investors are advised to monitor these developments as Molina plans to release its complete second-quarter results later this month.
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