Molina falls on concerns around Obamacare, Medicaid businesses
MOH•Guidance raised, but expectations remain higher
Molina primarily sells Medicaid plans to low-income Americans and also offers coverage under Obamacare.
The health insurer now expects annual adjusted earnings to be at least $5.25 per share, from at least $5.00 previously.
"We believe the first-half outperformance and management's initial cadence would indicate an increase to guidance of at least $0.50 versus the $0.25 guidance increase," said J.P. Morgan analysts.
The company is set to hold its earnings conference call with analysts and investors at 8 a.m. ET Thursday.
Analysts flag enrollment pressure and state budget risks
Americans are dropping off the plans — established under former President Barack Obama's Affordable Care Act — this year as many struggle to make payments due to the end of extra subsidies created during the COVID-19 pandemic.
Analysts also raised concerns about the future of the company's Medicaid business, citing tight state budgets, new work requirements for eligibility, and twice-yearly eligibility checks, rather than annually, that could increase drop-off rates.
Baird analyst Michael Ha said Medicaid membership continues to lag expectation and incremental membership attrition could become a larger challenge in the second half of 2026 and into 2027.
"We believe the primary focus of the Molina investment debate continues to be 2027 earnings power," Ha said.
Shares fall on worry over Marketplace and Medicaid trends
Shares of health insurer Molina Healthcare fell 9% in premarket trading on Thursday as concerns about the company's Obamacare and Medicaid businesses weighed on its second-quarter results.
