Molina Healthcare (MOH) Stock Forecast & Price Target

Molina Healthcare Inc. reported better-than-expected Medicare membership and revenue, with a Medicare Medical Care Ratio (MCR) of 90.0%, an increase of approximately 170 basis points sequentially, driven by heightened utilization in acute populations. The Medicaid segment showed an MCR of 91.3%, reflecting year-over-year and sequential increases, attributed to rising utilization among both new and renewing members, along with pressures from prior member reconciliations. Additionally, the Marketplace segment experienced unprecedented growth in utilization, with a Medical Loss Ratio (MLR) of 95.6%, suggesting a robust demand for its services across government-funded programs.

Molina Healthcare's stock outlook is negatively impacted by worsening trends in its marketplace segment, with significant deterioration noted in the data received after the company’s July guidance update. The company's heightened medical cost pressures across all segments, particularly driven by challenges in the Medicaid and Marketplace lines, has led to a reduction in estimated earnings per share (EPS) for 2025 to $14.02, substantially lower than management’s guidance of at least $19.00. Furthermore, the anticipated risk deterioration and market shrinkage for 2026 are expected to exacerbate these financial pressures, contributing to the downward revision of future EPS estimates to $19.02 and $18.74 for 2025 and 2026, respectively.