Adds analyst comment in paragraph 6, updates shares

By Sneha S K and Sriparna Roy

Feb 6 (Reuters) - Centene CNC.N on Friday forecast 2026 profit above Wall Street expectations, contrasting with peers that have warned of persistent pressure from elevated medical costs.

The insurer aims to return to profit growth this year after two turbulent years in which rising costs in Affordable Care Act or Obamacare plans weighed on the industry.

"We are pleased to end a challenging year...with the goal of restoring Marketplace profitability and stabilizing the trajectory of our Medicaid business," said CEO Sarah London.

Analysts said Centene's forecast should alleviate some fears after a dismal outlook from peer Molina Healthcare MOH.N, which had weighed on Centene's stock, although some cautioned Molina's issues may be more company-specific.

Centene fell as much as 12% from the previous session's close, but the shares pared declines to trade 5% lower premarket after the results.

We expect the magnitude of Molina's unfavorable earnings to prevent Centene from moving higher today, said Baird analyst Michael Ha.

Along with high costs due to a mismatch in rates and demand for healthcare, the industry will also be pressured by President Donald Trump's tax and budget bill that will decrease funding for Medicaid plans for low-income Americans.

The expiration of COVID-pandemic-expanded subsidies will also result in a sicker member pool under Obamacare plans, some insurers have said.

Centene sees 2026 medical costs in line with analysts expectations, while revenue forecast was below estimates.

Revenue is expected between $186.5 billion and $190.5 billion, compared to estimates of $193.43 billion. Centene reported 2025 revenue of $194.8 billion.

UnitedHealth UNH.N and Elevance ELV.N have also flagged a revenue decline for next year. 2026 adjusted profit per share is projected to exceed $3 above estimates of $2.94 per share.

For the quarter, Centene's medical cost ratio of 94.3% came in higher than 89.6% last year, driven partly by a higher number of sicker patients in its Obamacare plans.

It reported smaller-than-expected fourth quarter loss of $1.19 per share compared to estimates of a loss of $1.22 per share.