Shares of Molina Healthcare Inc. (NYSE:MOH) slumped to a 52-week low, closing at $226.48, capping off a year-long decline of over 22%. The drop reflects growing investor unease as the managed care provider grapples with sector-wide headwinds and mounting cost pressures.
The company recently revised its full-year 2025 earnings forecast downward, now projecting earnings per share (EPS) in the range of $21.50 to $22.50—well below its earlier outlook exceeding $24.50. The revised guidance comes as Molina contends with rising medical expenses across its Medicaid, Medicare, and Affordable Care Act (ACA) marketplace operations.
Adding to investor concerns, Molina pre-announced weaker-than-expected Q2 earnings, forecasting adjusted EPS of $5.50—short of analysts’ consensus of $6.20.
Wall Street responded swiftly to the developments. Wolfe Research maintained a Peerperform rating, while Morgan Stanley downgraded Molina from Overweight to Equalweight, citing rising healthcare utilization. UBS and Barclays both trimmed their price targets to $260 and $270, respectively, attributing their revisions to heightened cost risks. Barclays and Morgan Stanley also lowered earnings estimates in line with Molina’s revised guidance and higher medical loss ratios.
CEO Joseph Zubretsky acknowledged the financial strain, attributing it to a “temporary dislocation” between insurance premium rates and accelerating medical cost trends. He emphasized that the company is taking strategic measures to adapt and expects more stability going forward.
Molina plans to release its full second-quarter results later this month, which investors will closely scrutinize for signs of recovery or further erosion.
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