Centene Corp.

Strong Q3 beat + raised 2026 EPS outlook - Reported Q3 adjusted diluted EPS of $0.58, ahead of prior expectations. - Raised full-year 2026 adjusted diluted EPS guidance to >$5.20 (previously >$4.80). - Consolidated HBR (medical cost ratio) improved to 92.7% in Q3 (better than expected), supporting improved full-year HBR guidance by ~15 bps at midpoint. - SG&A improved: adjusted SG&A expense ratio 6.5% in Q3 vs 7.0% last year; full-year midpoint held around 7.2%.

Medicaid: trend stabilization, on-track margins, but policy/membership headwinds into 2027 - Medicaid HBR 93.6% in Q3, improving sequentially +30 bps vs Q2, tracking toward ~93.5% full-year target. - Core cost drivers (continued focus areas): behavioral health, home health, high-cost drugs—noted year-over-year stabilization in behavioral health trend and early stabilization signals in home health. - Membership pressure continues: ended Q3 with 11.9M members, -5.0% YTD, and company expects full-year membership to be down ~8%–9% vs 2025 (due to eligibility “clean-up” and OB3 implementation effects). - Rate setting for 1/1 cohort: early signals of strong engagement; states increasingly willing to explicitly model acuity impacts from work requirements and may adjust rates mid-cycle (investors should still view January 1 acuity/rate adequacy as an ongoing uncertainty).

Medicare: strong execution; breakeven earlier than planned + 2027 footprint/margin strategy - Medicare segment delivered HBR 93.8%, stronger than expected. - Medicare Advantage and Part D both exceeded expectations; company expects to reach Medicare Advantage breakeven in 2026 (one year ahead of plan). - For 2027, company expects Medicare Advantage membership to decline YoY as it retools marketing/footprint toward differentiated geographies/populations to support margin expansion in later years. - CMS STARS (affecting 2028 plan year) roughly: ~42% at/above 3.5 stars, ~10% in 4 stars, described as in-line; management highlights raw score improvements but emphasizes continued advocacy for STAR reforms.