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Molina Healthcare's analyst price target has decreased from $202.43 to $189.43. Analysts cite growing industry cost pressures, challenging 2026 Star plan benchmarks, and dampened near-term earnings visibility across managed care companies as key reasons for this revision.

Analyst Commentary

Recent Street research highlights a range of perspectives from market watchers regarding Molina Healthcare’s outlook, with viewpoints shaped by broader industry developments and company-specific updates.

Bullish Takeaways

• Some bullish analysts note that certain health insurers are expected to retain a high percentage of members in top-rated plans. This signals ongoing operational resilience and potential for stable membership retention in high-performing product lines.
• Updates on risk adjustment data and statutory filings support comfort with 2025 earnings guidance and suggest that, in the near term, execution remains broadly on track despite sector volatility.
• Industry surveys indicate solid earnings visibility in the hospital segment, providing an adjacent supportive backdrop that could help offset cost headwinds impacting managed care names like Molina Healthcare.

Bearish Takeaways

• Bearish analysts point to increasingly challenging Star plan benchmarks for 2026. They note that cut points have become tougher for the majority of plans, which may pressure plan ratings and associated reimbursement in future periods.
• There has been a noticeable trend of price target reductions and ratings downgrades for Molina Healthcare, reflecting cautiousness about near-term earnings visibility, ongoing cost pressures, and potentially softening risk-reward tradeoff as regulatory and industry dynamics evolve.
• Analysts have highlighted unexpected cost trend increases flagged in recent company updates, as well as incremental headwinds across multiple lines of business, dampening confidence in execution and valuation upside.
• The combination of heightened industry cost pressure, increased volatility tied to policy changes, and signs of rate and trend instability present ongoing challenges to growth and margin expansion.

What's in the News

• Enhanced subsidies for Affordable Care Act health insurance are central to ongoing government shutdown negotiations. Decisions about their extension could impact over 22 million Americans receiving aid (The Wall Street Journal).
• Judges in Texas and Connecticut have dismissed cases challenging the constitutionality of the Medicare Drug Price Negotiation Program, further solidifying federal efforts to negotiate pharmaceutical prices (The Hill).
• U.S. health insurers have seen prescription drug denial rates rise from 18.3% to 22.9% between 2016 and 2023, attributed to higher costs of new medications and increased claims automation (The New York Times).
• Insurers are seeking double-digit premium increases for 2026 ACA marketplace plans. They cite rising health care costs and prospective federal subsidy reductions as driving factors (The Wall Street Journal).
• A policy and legal debate is intensifying over proposals to expand the scope of the Medicare drug price negotiation program, drawing resistance from the pharmaceutical industry (Bloomberg Law).

Valuation Changes

• Fair Value Estimate has declined from $202.43 to $189.43, reflecting a notable downward revision in analysts' outlook for Molina Healthcare.
• Discount Rate remains unchanged at 6.78%, indicating consistent risk assessment by analysts despite other valuation adjustments.
• Revenue Growth projections are effectively flat, staying near 6.80%, with only a negligible decrease from previous estimates.
• Net Profit Margin expectation holds steady at approximately 2.51%, showing stability in anticipated profitability levels.
• Future P/E ratio has decreased from 8.89x to 8.32x. This points to more conservative expectations for Molina Healthcare’s earnings multiple going forward.