Core Viewpoint - Elevance Health (ELV) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The earnings report is scheduled for April 22, 2025, with expectations of quarterly earnings at $11.09 per share, reflecting a +4.2% year-over-year change, and revenues projected at $45.95 billion, an increase of 8.7% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised down by 1.46% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Elevance Health is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +4.75%, suggesting a bullish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - Elevance Health currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Elevance Health had an earnings surprise of +1.05%, having beaten consensus EPS estimates three times over the last four quarters [12][13]. Industry Context - Medpace (MEDP), another player in the Zacks Medical Services industry, is expected to report earnings of $3.06 per share, reflecting a -4.4% year-over-year change, with revenues projected at $530.12 million, up 3.7% from the previous year [17]. - Medpace's consensus EPS estimate has been revised down by 1.5% over the last 30 days, resulting in an Earnings ESP of -3.39%, making it challenging to predict a beat on the consensus EPS estimate [18].

Core Insights - Health insurance stocks experienced a significant surge following the announcement of a more than 5% increase in government reimbursement rates for 2026 Medicare Advantage plans [1][2][3] Group 1: Government Announcement - The Centers for Medicare & Medicaid Services (CMS) announced a 5.06% increase in payments to Medicare Advantage plans for the 2026 calendar year, which is more than double the initial proposal made in January [2][3] - This increase is expected to generate an additional $25 billion in revenue for the health insurance industry [2] Group 2: Market Reaction - Major health insurance stocks rallied, with UnitedHealth Group rising by 7%, CVS Health by 8%, Human by 10%, and Elevance Health by 4% [3] - The finalized rate increase is 2.83 percentage points higher than the Biden administration's earlier proposal, attributed to new health spending data [3] Group 3: Industry Implications - The increase in average reimbursement rates allows insurers to receive more funding per Medicare Advantage plan recipient, enabling them to offer more services and generate additional revenue [5] - This reimbursement increase is particularly beneficial for large insurers, as the Medicare business had been a drag on profits over the past year [5]

Core Viewpoint - Elevance Health's shares experienced a 5.4% increase, closing at $452.69, driven by notable trading volume and a broader market shift towards defensive sectors like healthcare amid market volatility [1][2]. Group 1: Stock Performance - Elevance Health's stock gained 8% over the past four weeks, reflecting investor interest in stable investments during uncertain market conditions [1][2]. - The company's share price rise is attributed to a shift from tech and industrial stocks to healthcare, as investors seek stability [2]. Group 2: Financial Outlook - The upcoming quarterly earnings report is expected to show earnings of $10.92 per share, a year-over-year increase of 2.6%, with revenues projected at $45.94 billion, up 8.7% from the previous year [4]. - Despite the positive earnings and revenue growth expectations, the consensus EPS estimate has been revised 1.4% lower in the last 30 days, indicating potential caution among investors [5]. Group 3: Strategic Positioning - Elevance Health's strong position in managed care and stable revenue from government-backed programs enhances its appeal to risk-averse investors [2]. - The company is focusing on improving margins and operational efficiencies in Medicaid and Medicare Advantage plans, which is expected to strengthen its financial position [3].

Core Insights - The pharmaceutical and healthcare sectors are characterized by significant volatility, with companies often facing long periods of unprofitability before achieving success, particularly when new products or clinical trial results emerge [1][2] - Tracking firms that attract investor interest can be beneficial, but caution is advised to avoid entering positions too late [2] Company Summaries Viking Therapeutics Inc. (VKTX) - Viking Therapeutics is gaining attention due to its potential contribution to the GLP-1 weight loss market, with its drug VK2735 completing enrollment for a Phase 2 clinical trial [4][5] - The stock forecast for Viking indicates a potential upside of 271.08%, with a 12-month price target of $95.18, compared to the current price of $25.65 [4] - Initial studies suggest VK2735 may facilitate faster weight loss than existing GLP-1 agonists, and it is being developed in both injectable and oral forms [5] - Despite the promising outlook, shares have declined over 67% in the year leading to March 27, 2025, due to investor impatience regarding the Phase 3 trial [6] Absci Corp. (ABSI) - Absci utilizes AI technology in drug development, with a 12-month stock price forecast indicating a potential upside of 181.48%, targeting $7.60 from a current price of $2.70 [8] - The company has reported significant successes in its drug pipeline, but also rising expenses, with R&D costs increasing by approximately 50% year-over-year, leading to net losses widening to $29 million [9][10] - Cash reserves have decreased to $112.4 million, necessitating careful management as the company seeks to build revenue-generating capacity [10] Elevance Health Inc. (ELV) - Elevance Health is positioned as a defensive play in healthcare, with a 12-month stock price forecast suggesting a 20.37% upside, targeting $519.81 from a current price of $431.84 [11] - The company boasts attractive valuation metrics, including a price-to-sales ratio of 0.55 and a low forward price-to-earnings ratio of 12.7, which may enhance efficiency and margins through AI integration [12] - Despite regulatory uncertainties in the health benefits industry, Elevance's strong market position is expected to provide resilience, with a consensus buy rating from 14 out of 16 analysts [12]

U.S. health benefits company Elevance Health, Inc. (ELV) appears undervalued. It is currently trading at 12.25X forward 12-month earnings, below its five-year median of 13.44X and the industry average of 15.40X. It also trades at a discount to major health insurance companies like UnitedHealth Group Incorporated (UNH) and Humana Inc. (HUM) , which have forward P/E ratios of 16.46X and 16.86X, respectively. ELV currently holds a Value Score of A.This discounted valuation could reflect market skepticism about ...

Core Insights - Elevance Health's share prices declined approximately 30% following the Q3 results, prompting a revision of both short-term and long-term growth outlooks [1]. Group 1: Company Performance - The company experienced a significant drop in share prices after the Q3 results, indicating potential concerns regarding its financial health and future performance [1]. - Elevance Health's growth outlook has been revised, suggesting a reassessment of its market position and strategic direction [1]. Group 2: Valuation Approach - The analysis utilizes Cash Flow Returns On Investment based DCF valuation tools provided by ROCGA Research, highlighting a systematic approach to valuing companies [1]. - ROCGA Research has over 20 years of experience in investment analysis, focusing on identifying undervalued and quality companies [1].

Elevance Health (ELV) shares soared 3.1% in the last trading session to close at $422.04. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.4% gain over the past four weeks.Elevance Health rallied for the sixth straight day, driven by optimism around its operations. The reaffirmed earnings forecast and medical enrollments boosted investor confidence, while multiple analyst updates with higher price targets added fuel to the momen ...

Group 1 - The article emphasizes a dividend-focused value investment strategy that prioritizes capital preservation and steady income growth [1] - The author discusses a diversified dividend stock portfolio that includes high-quality value stocks with potential for meaningful growth and long-term safety [1] Group 2 - The author has a beneficial long position in the shares of ELV, indicating a personal investment interest in the company [2] - The article is presented as a personal opinion and does not constitute professional investment or tax advice [3]

I only buy strong businesses. I only buy them when they're cheap. Backgrounds in economics, philosophy, government, data. I started my investing journey with a fairly concentrated portfolio of Canadian dividend payers in the telecom, pipeline and banking industries. I have moved forward through different industries including payments, US regional banking, Chinese and Brazilian equities, REITs, technology companies and a few other emerging market opportunities, as well as microcap through to megacap range. I ...

Revenue Sources - Approximately 31%, 29%, and 28% of total consolidated revenues were generated from U.S. government agencies for the years ended December 31, 2024, 2023, and 2022, respectively[24]. - The company’s Medicaid plans cover various state-sponsored programs and provided services in multiple states, including California, Florida, and Texas in 2024[37]. - The company anticipates growth in Public Exchange membership as former Medicaid members seek alternative coverage options, with plans to enter select service areas in Florida, Maryland, and Texas in 2025[31]. - The Consolidated Appropriations Act of 2023 has led to a decline in Medicaid membership, with expectations for growth in commercial plans as members seek alternative coverage[80]. - The Inflation Reduction Act of 2022 has extended enhanced Premium Tax Credits through 2025, supporting growth in Individual Public Exchange enrollment[81]. Health Services and Products - The Health Benefits segment offers a comprehensive suite of health plans and services, including risk-based and fee-based products, catering to various customer types such as Individual, Employer Group, Medicare, and Medicaid members[26]. - CarelonRx, the pharmacy services segment, includes a comprehensive portfolio of pharmacy services and recently expanded through the acquisition of Paragon Healthcare, Inc. in March 2024[26]. - Carelon Services aims to deliver whole health affordably by integrating physical, behavioral, pharmacy, and social services[41]. - Carelon Health provides value-based whole health solutions, managing home health and post-acute care costs, and has completed the acquisition of CareBridge to enhance virtual care for complex Medicaid and Medicare patients[42]. - The company’s product development emphasizes the unique needs of different customer types, aiming to provide value while achieving profitability[29]. Digital and Technological Advancements - The company continues to enhance customer interactions through digital technology, improving service quality and optimizing administrative costs[23]. - The digital engagement platform, Sydney Health, provides members with personalized health resources and virtual care services[66]. - Carelon's pricing strategy is based on predictive modeling and proprietary research, positioning the company for growth opportunities in new and existing markets[46]. Quality and Compliance - Carelon was awarded the NCQA 2023-2024 Innovation Award for advancements in maternal and neonatal outcomes, highlighting its commitment to quality healthcare[67]. - The company has incorporated several quality healthcare measures, including HEDIS, into its accreditation processes to improve care quality[68]. - Carelon Medical Benefits Management, Inc. aims to promote appropriate and affordable member care, focusing on areas such as maternity care and oncology drugs[68]. - The company has developed programs to address healthcare quality by identifying and closing care gaps, including a social determinants of health program[70]. - The company has implemented a "Food as Medicine" strategy to address food and nutrition insecurity among its members[71]. Financial Performance and Cash Flow - The net cash provided by operating activities decreased to $5,808 million in 2024 from $8,061 million in 2023, a decline of $2,253 million[353]. - Total sources of cash increased to $12,815 million in 2024, up from $8,839 million in 2023, reflecting a change of $3,976 million[353]. - The company issued $6,200 million in short- and long-term debt in 2024, a significant increase from $626 million in 2023[353]. - Cash dividends paid increased to $1,508 million in 2024 from $1,395 million in 2023, an increase of $113 million[353]. - The company reported a net increase in cash and cash equivalents of $1,828 million in 2024, compared to a decrease of $861 million in 2023[353]. Debt and Liquidity - The company's consolidated debt-to-capital ratio increased to 43.0% as of December 31, 2024, compared to 38.9% in 2023[360]. - Future debt and estimated interest payments total $52,073 million, with $2,855 million due within the next twelve months[376]. - The company has a common stock repurchase program authorized for up to $9,300 million, with no specified duration[374]. - The company has a senior revolving credit facility providing up to $4,000 million, maturing in April 2027, with a current debt-to-capital ratio of 43.0%[363]. - The company is in compliance with all debt covenants under its 5-Year Facility as of December 31, 2024[364]. Employee Engagement and Development - Employee population as of December 31, 2024, consisted of approximately 104,200 individuals, with 99% employed full-time[107]. - Company conducts annual internal associate engagement surveys to gather feedback and improve policies[111]. - Company achieved a pay equity analysis showing that pay for women is 99.2% of men and pay for people of color is 99.8% of white associates[113]. - In 2024, the company invested an average of approximately 27 hours of training and development per associate to enhance talent development and retention[114]. Market Competition - The managed care industry is highly competitive, with intense competition driven by aggressive marketing, pricing, and technological advancements[43]. - Carelon's provider networks offer competitive unit cost positions, allowing for a broad range of affordable health benefit products[47]. - The company employs a multi-year contracting strategy with providers to limit exposure to medical cost inflation and improve cost predictability[56]. - Carelon's medical management programs are designed to improve care quality and promote cost-effective medical care, administered by physicians and nurses[62]. Regulatory Environment - The company is subject to comprehensive state, federal, and international regulations that impact its operations and may lead to increased costs[76]. - The company’s insurance and HMO subsidiaries must comply with statutory risk-based capital requirements, which they have exceeded as of December 31, 2024[88]. - The ACA continues to introduce new risks and regulatory challenges that impact the company’s business model and strategy[89]. - The company is required to pay an annual license fee to the BCBSA based on enrollment and must comply with various operational requirements[73]. - Approximately 54.2% of premium revenue and 18.4% of medical membership were subject to minimum MLR regulations for the year ended December 31, 2024[90]. Medicare Advantage - 53% of Medicare Advantage members are enrolled in plans rated at least 4.0 Stars or higher, an increase from 34% in the original 2024 Star Rating[91]. - Expected reduction in 2026 operating revenue of approximately $183 million due to changes in Medicare Advantage Star Ratings[91]. - Anticipated growth in Public Exchange membership as former Medicaid members seek alternative coverage options[91]. - Company is entering select service areas in Florida, Maryland, and Texas in 2025, evaluating further expansion opportunities[91].