Watch CNBC's full interview with Morgan Stanley's Dan Simkowitz
Dan Simkowitz, Morgan Stanley co-president, joins CNBC's 'Squawk on the Street' to discuss outlooks on credit, the economy, and more.
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CNBC
42 minutes ago
- CNBC
Morgan Stanley's Wilson sees Israel-Iran causing only 5%-7% stock pullback, unless oil moves this high
The U.S. stock market will likely see only a minor pullback as a consequence of the conflict between Iran and Israel, but the a potential hit to oil supplies is still a risk, according to Morgan Stanley's Mike Wilson. The firm's chief investment officer and chair of the global investment committee said Tuesday on CNBC's " Power Lunch " that the fundamental backdrop for stocks is strong enough for the market to withstand the current level of geopolitical risk. "Right now, it feels like this is a 5 to 7% correction type of an event, for now, but we've got to stay vigilant," Wilson said. The S & P 500 is down 1% from where it closed last Thursday, before Israel's first strike on Iran. One variable that could change this setup is oil prices. Energy is in the spotlight in this conflict due to Iran's status as the world's ninth largest oil producer and its proximity to the Strait of Hormuz, a key shipping lane in and out of the Persian Gulf. Oil prices rose sharply on Tuesday, but the front-month futures for West Texas Intermediate crude were still trading just under $75 per barrel as of 4 p.m. ET, below the peak price on Friday. "I think if oil were to spike to $90, or something north of $90, we'd have a real problem, but that's not the case at the moment," Wilson said. @CL.1 5D mountain Oil futures were trading below their peak Friday levels despite Tuesday's spike. Wilson's comments came shortly after President Donald Trump threatened Iran's leader in a social media post, calling for the Islamic Republic's " unconditional surrender. " Trump met with top national security officials on Tuesday to discuss the conflict, two White House officials told NBC News . Wilson said that the conflict would likely be overshadowed in the minds of investors by an improving outlook for corporate earnings. "We're not bullish because we're hoping for some conflict here. We're bullish because earnings revisions have turned up, and they've turned up meaningfully since the middle of April," Wilson said. Wilson is not alone in downplaying the potential market impact of the attacks in the Middle East. Other Wall Street commentators have pointed out that there is a history of quick rebounds for stocks following geopolitical events. To be sure, Wilson also said that "we don't want to diminish" the risk to human life from the conflict.
Yahoo
42 minutes ago
- Yahoo
Morgan Stanley Bets on These 2 Managed Care Stocks Despite Policy Uncertainty
A major shift in U.S. social policy may be underway. The Republican-led Congress and White House are advancing a new tax bill that reflects a stark departure from the previous administration's approach. Central to the legislation are deep cuts – amounting to roughly $1 trillion – to key welfare programs like Medicaid and SNAP (Supplemental Nutrition Assistance Program). Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter These entitlement programs have traditionally been considered politically off-limits, but the current majority's willingness to target them signals a broader agenda and raises the prospect of continued policy uncertainty. Despite this uncertain future for the important Medicaid program, Morgan Stanley sees an interesting opportunity for investors in care stocks. The bank's analysis team, led by Erin Wright, an analyst ranked among the top 3% of Wall Street's stock experts, says of the managed care sector: 'We see manageable policy risk, opportunities across D-SNP and ICHRA, and capital deployment supporting +HSD to LDD long-term EPS growth. While policy risk remains in undefined government funding reductions, we view the outcome of preliminary slated Medicaid cuts to be better than feared and this overhang to be disproportionately reflected in the stocks.' Putting that stance into practice, Wright goes on to recommend two specific stocks in the managed care segment. We've used the TipRanks data platform to look up the general Wall Street view of them, and found that both hold Buy ratings and offer double-digit upside potential. Here are the details, and the Morgan Stanley comments. Centene Corporation (CNC) Centene, the first company we'll look at here, has more than 40 years' experience as a managed care insurance provider in the US healthcare industry. The company offers a wide variety of coverage plans in the private health insurance market, ranging from lower-cost affordable plans to higher-end premium offerings – and the company also acts as a provider for government-backed plans, in Medicaid and Medicare programs, as well as military and veterans' services. The numbers show the scale of Centene's operations – and the company's status as one of the major players in the US health insurance scene. Centene boasts a market cap of $27 billion, and employs more than 60,000 people. The company has more than 27.9 million managed care members enrolled in its plans, and boasts that it provides coverage for more than 1 in every 15 people across all 50 states. Specifically, Centene is the largest managed care Medicaid provider in the US, and holds leading positions in three of the leading state markets for Medicaid: Florida, New York, and Texas. Centene also claims to be the 'number one' health insurance carrier on the Health Insurance Marketplace, the exchange originally set up under the Affordable Care Act. The market uncertainties, especially those related to the Republicans' attitude toward health and welfare entitlements, have put pressure on CNC shares this year, and the stock is down approximately 10% for the year-to-date. While the stock is down, however, the company put in a strong display in its last set of reported financial results, covering 1Q25. Membership in the quarter was up 29% year-over-year in the Marketplace, and grew by 22% in Medicare PDP. At the top line, Centene's revenue gained 15% compared to 1Q24, to reach $46.62 billion, and beat the forecast by $3.37 billion. The company reported a bottom line of $2.90 per share, by non-GAAP measures, a figure that was 38 cents per share better than had been anticipated. Turning to Erin Wright, and the Morgan Stanley view, we find that she is impressed by Centene's strong position, which gives the company a sound foundation for future growth in an expanding health insurance niche. The 5-star analyst writes, 'Based on our proprietary analysis, with impending D-SNP integration requirements slated in 2027 and 2030, we view CNC as well-poised for outsized growth in D-SNP (+10% 5-year CAGR), an inherently higher margin segment and a dynamic that is likely overlooked by investors. Faster growth across higher margin segments along with continuing cost savings / S&A leverage should support margin expansion over time. These drivers, along with capital deployment, should support EPS CAGR of +8.8% over the next three years, slightly ahead of Consensus (+8.6%)…' These comments back up the analyst's Overweight (i.e., Buy) rating on this stock, while her $70 price target implies a potential upside for the year ahead of 27%. (To watch Wright's track record, click here) The Moderate Buy consensus rating on CNC is based on 12 recent analyst reviews, that include 7 to Buy and 5 to Hold. The shares are currently trading for $54.68 and their $73.60 average price target points toward a gain of 34.5% in the next 12 months. (See CNC stock forecast) Molina Healthcare (MOH) Next on our list, Molina Healthcare, is another multi-billion health insurance provider, with a focus on offering plans through Medicaid and Medicare. The company has been in business since 1980, and today has a market cap of nearly $16 billion. Molina's plans cover a variety of services, starting with primary care and prescription drugs, but also including specialist care, mental health services, vision and dental plans, and even medical transportation. Molina Healthcare is based in Long Beach, California, where it was founded by an emergency room physician. The company's original goal, still relevant today, was to 'fill the gap,' and provide coverage for indigent and low-income patients who would otherwise have to use ER facilities for routine medical procedures. Today, in addition to providing managed care services under Medicare and Medicaid, Molina also operates as an HMO and provides plans through the various state health insurance exchanges. As of this past March 31, the end of 1Q25, Molina had approximately 5.8 million members enrolled. Molina's large enrollment numbers are a solid asset, and translate to sound financial results. In 1Q25, the last period reported, the company's total revenue came to $11.15 billion, a figure that was up more than 12% year-over-year and beat the estimates by $340 million. This revenue performance was backed by strong earnings; the company reported a non-GAAP EPS of $6.08, beating the forecast by 12 cents per share. When we check in again with Morgan Stanley's Erin Wright, we find the top-rated analyst impressed by Molina's prospects. Outlining everything, with particular attention to the company's probable ability to expand revenue growth, Wright says, 'We view MOH as well-positioned for faster than market premium revenue growth with continuing high contract retention rates, where it boasts a successful track record, new contract procurements (MSe +$3.5B in 2025+), and compelling opportunities in D-SNP alignment, helping to fuel an estimated +7.2% organic premium revenue CAGR over the next 3 years, with MSe $8.65/sh embedded earnings power in 2026+. Durable industry leading margins and buybacks (~2% annually) should drive MSe +12.7% EPS CAGR over the next three years (Cons. +12.8%). Consistent with past practices, M&A should also further supplement growth.' Wright puts an Overweight (i.e., Buy) rating on Molina's stock, which she complements with a $364 price target that suggests an upside for the coming year of 25.5%. Turning now to the overall Street view on MOH, the stock has 11 recent reviews, including 7 Buys, 3 Holds, and 1 Sell, backing up its Moderate Buy consensus rating. The stock's $290.25 trading price and $370.60 average target price together imply that the shares will gain 27.5% on the one-year horizon. (See MOH stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
Yahoo
3 hours ago
- Yahoo
Blackstone-owned gambling company Cirsa plans IPO in Spain
MADRID (Reuters) -Blackstone's gaming company Cirsa said on Wednesday it planned to raise as much as 460 million euros ($529.46 million) in an initial public offering of shares on the Madrid stock exchange this year. The company intends to sell up to 400 million euros in newly issued shares and an additional 60 million euros in a secondary share sale, it said in a statement. Spain-based Cirsa plans to use to the proceeds to boost growth and repay debt, it said. The statement did not specify the size of the stake Cirsa intends to float or the valuation it is aiming for. The company operates casinos and gambling platforms in Spain, Latin America, Morocco and Italy and entered Portugal and Puerto Rico in 2024. Cirsa said its earnings before interest, taxes, depreciation and amortization were 699 million euros in 2024, out of net revenues of 2.15 billion euros. Morgan Stanley, Barclays and Deutsche Bank are acting as joint global coordinators on the offering. The initial public offering is the first in Madrid since Spanish clean energy and water utility Cox went public in November last year. ($1 = 0.8688 euros)
