Here’s Why Centene Corporation (CNC) Reduced Its Earnings Outlook

CNC +2.43%

Scout Investments, Inc., an affiliate of Carillon Tower Advisers, recently released its third-quarter 2025 investor letter for “Carillon Scout Mid Cap Fund”. A copy of the letter can be downloaded here. The Russell Midcap Index posted positive returns in the quarter, fueled by strong corporate earnings, the continued momentum in artificial intelligence (AI) infrastructure, and the anticipation of the U.S. Federal Reserve’s (Fed) interest rates. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Carillon Scout Mid Cap Fund highlighted stocks such as Centene Corporation (NYSE:CNC). Centene Corporation (NYSE:CNC) is a healthcare enterprise that offers services to under-insured and uninsured families and commercial organizations. The one-month return of Centene Corporation (NYSE:CNC) was 5.35%, and its shares lost 35.07% of their value over the last 52 weeks. On December 02, 2025, Centene Corporation (NYSE:CNC) stock closed at $38.81 per share, with a market capitalization of $19.08 billion.

Carillon Scout Mid Cap Fund stated the following regarding Centene Corporation (NYSE:CNC) in its third quarter 2025 investor letter:

"Centene Corporation (NYSE:CNC) provides managed care services for government sponsored health plans. Early in the quarter, Centene lowered its earnings guidance dramatically because of data showing higher than anticipated utilization in the plans that Centene had sold through the federal health insurance exchange, along with continued pressure in its Medicaid business. The outlook for a rebound in earnings became unclear. States have been relatively slow to adjust Centene’s rate, and changes to subsidy policy for the federal health insurance exchanges will likely result in a smaller, sicker patient population for Centene to manage."

Centene Corporation (NYSE:CNC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the third quarter, which was 59 in the previous quarter. While we acknowledge the potential of Centene Corporation (NYSE:CNC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Centene Corporation (NYSE:CNC) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.