Elevance Health (ELV) came out with quarterly earnings of $6.03 per share, beating the Zacks Consensus Estimate of $4.98 per share. This compares to earnings of $8.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +21.08%. A quarter ago, it was expected that this health insurer would post earnings of $9.16 per share when it actually produced earnings of $8.84, delivering a surprise of -3.49%.Over the last four quarters, the c ...

Core Insights - Elevance Health reported an increase in profit for the third quarter, driven by a rise in revenue despite a decline in overall memberships [1] Financial Performance - The company experienced higher profits in the third quarter compared to previous periods [1] - Revenue increased, contributing positively to the overall financial results [1] Membership Trends - There was a noted slip in overall memberships, indicating a potential area of concern for future growth [1]

Corporate Finance and M&A Activity - Coinbase (COIN) is set to acquire the crypto-investing platform Echo for approximately $375 million, marking its eighth acquisition this year and reflecting its active expansion amid favorable U.S. cryptocurrency policies [2][9] - Hon Hai Precision Industry Co. Ltd., a key supplier for Apple (AAPL), has mandated banks for its inaugural Euro bond sale, which could provide new capital to support operations and expand capabilities within the global technology supply chain [3][9] Q3 2025 Earnings Season Highlights - Elevance Health (ELV) reported adjusted earnings per share (EPS) of $6.03, significantly exceeding the estimated $4.93, with revenue of $50.09 billion surpassing the $49.38 billion estimate, although medical membership was slightly below projections [4][9] - Danaher (DHR) posted adjusted EPS of $1.89 against an estimated $1.72, with revenue of $6.1 billion exceeding the $6.01 billion estimate, reaffirming its full-year adjusted EPS outlook in the range of $7.70 to $7.80 [5][9] Currency Markets and European Politics - The USD/JPY currency pair extended its gains by 0.8% to reach a one-week high of 151.95, reflecting ongoing dynamics in global foreign exchange markets [6][9] - French President Emmanuel Macron reiterated the possibility of a referendum on pension reform, emphasizing its importance despite recent indications from Prime Minister Sebastien Lecornu to suspend the reform until after the 2027 presidential elections [7][9]

Core Insights - Elevance Health reported third-quarter profit that exceeded Wall Street estimates, indicating strong financial performance [1] Financial Performance - The company successfully managed to keep medical costs in check, contributing to its better-than-expected profit results [1]

Financial Performance - Operating revenue for Q3 2025 was $50.1 billion, an increase of 12.0% from Q3 2024[5] - Diluted EPS for Q3 2025 was $5.32, with adjusted diluted EPS at $6.03[5] - Total revenues for the three months ended September 30, 2025, increased by 12.4% to $50,711 million compared to $45,106 million in 2024[38] - Health Benefits operating revenue for the three months ended September 30, 2025, rose by 10.4% to $42,246 million from $38,278 million in 2024[46] - Carelon's operating revenue reached $18.3 billion in Q3 2025, a 33% increase compared to the prior year quarter[23] - Carelon Services segment reported a significant increase in operating revenue of 57.9%, reaching $7,324 million for the three months ended September 30, 2025[46] - Net income for the three months ended September 30, 2025, was $1,187 million, reflecting a 17.8% increase from $1,008 million in 2024[38] - Operating revenue for the nine months ended September 30, 2025, increased by 13.9% to $148,273 million, compared to $130,215 million in 2024[59] Expense and Margin Analysis - The benefit expense ratio increased to 91.3%, up 180 basis points year-over-year, primarily due to cost trends in the Medicare business[9] - The operating margin for the Health Benefits segment was 1.4%, down from 4.2% in the prior year[14] - Operating expenses as a percentage of total operating revenue decreased to 10.5% for the three months ended September 30, 2025, compared to 11.8% in 2024[38] - The company’s benefit expense as a percentage of premiums increased to 91.3% for the three months ended September 30, 2025, compared to 89.5% in 2024[38] - Adjusted operating expense ratio for the three months ended September 30, 2025, was 10.4%, an increase of 100 basis points compared to 9.4% in 2024[59] Shareholder Returns - The company returned $3.3 billion of capital to shareholders year-to-date[5] - Shareholders' earnings per diluted share increased by 22.0% to $5.32 for the three months ended September 30, 2025, from $4.36 in 2024[38] - Shareholders' net income for the three months ended September 30, 2025, was $1,189 million, representing a 17.0% increase compared to $1,016 million in 2024[56] - The company expects shareholders' earnings per diluted share for the full year 2025 to be approximately $24.70[59] Cash Flow and Assets - Operating cash flow was $4.2 billion year-to-date, a decrease of $0.9 billion year-over-year[11] - Cash and cash equivalents at the end of the period increased to $8,713 million from $7,866 million in 2024[42] - Total assets as of September 30, 2025, were $122,749 million, up from $116,889 million at the end of 2024[40] Risks and Uncertainties - The company emphasizes that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projections[63] - Key risks include trends in healthcare costs, reduced enrollment, and the impact of large-scale medical emergencies[63] - There are concerns regarding compliance with complex regulations related to Medicare and Medicaid programs, which could affect revenue[63] - The company faces competitive pressures and must adapt to changes in the industry to develop strategic growth opportunities[63] - Risks associated with mergers, acquisitions, and joint ventures are acknowledged, which could impact future performance[63] - The potential negative effects of substantial outstanding indebtedness and increased interest rates on financing costs are noted[63] - There are risks related to international operations and the ability to attract and retain employees in a competitive market[63] - The company warns of possible restrictions on dividend payments from subsidiaries and the need for adequate capital levels[63]

Core Insights - Global equity markets experienced broad positive returns in Q3 2025, driven by resilient corporate earnings, enthusiasm for AI, and the U.S. Federal Reserve's first interest rate cut of the year [3][21] - Emerging markets, particularly China, led the gains, supported by a U.S. trade truce and strength in the tech sector [3][4] - The Polaris Global Equity Composite gained 5.04% (net of fees) for the quarter, underperforming the MSCI World Index, which returned 7.36% [5][6] Market Performance - Developed markets saw weaker currencies benefiting export-oriented indices, with Japan's TOPIX Index up 11.0% and the U.K.'s FTSE All-Share Index up 6.9% [4] - The U.S. market, represented by the S&P 500 Index, gained over 8%, primarily due to tech and communication stocks [4] - France and Germany underperformed due to geopolitical and fiscal concerns, with tepid growth projections under new U.S. trade policy [4] Sector Analysis - The healthcare sector was the best performer, with notable gains from pharmaceutical stocks, while financials, consumer discretionary, and IT also contributed positively [5][6] - Health insurers faced challenges, with UnitedHealth Group and CVS Health posting over 10% returns, while Elevance Health's shares dropped sharply due to profit guidance cuts [7] - In IT, Samsung Electronics excelled with strong performance in HBM technology and a significant deal with Tesla for AI chip manufacturing [11] Company Highlights - United Therapeutics Corp. was a top contributor to portfolio performance, driven by positive clinical trial results for its drug Tyvaso, potentially adding $4-5 billion in peak sales [6] - AbbVie, Inc. expects high single-digit revenue growth through 2029, with flagship drugs projected to exceed $31 billion in sales by 2027 [6] - The Carlyle Group Inc. outperformed in the financial sector, up over 20% due to strong fee-based credit and secondaries business [8] Investment Strategy - The current economic environment is characterized by a "two-speed" economy, with a concentrated AI-driven boom amidst subdued growth in other sectors [21][22] - Financials are seen as attractive due to stable net interest margins and loan growth, while defensives like consumer staples and healthcare are expected to perform well [22] - Opportunities in economically-sensitive sectors are being explored, with a focus on industrials benefiting from AI integration and supply chain modernization [22][23]

Core Insights - Elevance Health, Inc. (ELV) is scheduled to report its Q3 2025 results on October 21, 2025, with earnings estimated at $4.97 per share and revenues of $49.5 billion [1][6] Earnings Estimates - The earnings estimate for Q3 2025 has seen one upward revision and two downward revisions, indicating a year-over-year decline of 40.6% [2] - The revenue estimate for Q3 2025 suggests a year-over-year increase of 10.7% [2] - For the full year 2025, the revenue consensus is $197.36 billion, reflecting a 12.6% year-over-year rise, while the EPS consensus is $29.96, indicating a 9.3% year-over-year decrease [3] Earnings Performance - Elevance's earnings have beaten the consensus estimate in two of the last four quarters, with an average surprise of negative 2.3% [3] Earnings Prediction Model - The current Earnings ESP for Elevance is +3.36%, but it holds a Zacks Rank of 4 (Sell), making an earnings beat uncertain [4] Revenue Drivers - The consensus estimate for product revenues indicates a 7.7% growth from the previous year's $5.9 billion, while premiums are expected to increase by 11.5% year-over-year [5][6] Cost and Expense Outlook - Elevated costs and benefit expenses are anticipated to impact profit margins negatively, with total expenses expected to rise around 9% year-over-year in Q3 [9] - The benefit expense ratio is estimated at 91.6, higher than the previous year's 89.5 [9] Segment Performance - The Health Benefits segment's operating income is projected to decrease by 45.5% year-over-year, with declining Medicaid memberships affecting premium growth [10]

Core Viewpoint - The market anticipates Elevance Health (ELV) will report a year-over-year decline in earnings despite higher revenues for the quarter ending September 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Elevance Health is expected to report quarterly earnings of $4.97 per share, reflecting a year-over-year decrease of 40.6%, while revenues are projected to reach $49.5 billion, an increase of 10.7% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 1.57% higher in the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a positive Earnings ESP of +3.36% for Elevance Health, suggesting analysts have recently become more optimistic about the company's earnings prospects [12]. Historical Performance - In the last reported quarter, Elevance Health was expected to post earnings of $9.16 per share but delivered $8.84, resulting in a surprise of -3.49%. Over the last four quarters, the company has beaten consensus EPS estimates twice [13][14]. Investment Considerations - Despite a positive Earnings ESP, Elevance Health carries a Zacks Rank of 4, making it challenging to predict an earnings beat conclusively [12]. Investors should consider other factors beyond earnings results when evaluating the stock [15][17].

Core Points - A lawsuit is currently pending against Elevance Health, Inc. (NYSE: ELV) regarding alleged violations of securities laws [2] - The plaintiff claims that Elevance misrepresented its monitoring of cost trends and the adequacy of premium rates negotiated with states, particularly concerning patients remaining on Medicaid [2] - An amended complaint was filed on October 7, 2025, urging investors who purchased shares prior to April 2024 to contact the Shareholders Foundation for further information [3] Summary by Sections Lawsuit Details - The lawsuit alleges that Elevance Health, Inc. misled investors about its financial guidance and the management of costs associated with Medicaid patients [2] - It is claimed that sicker patients with higher acuity remained on Medicaid, leading to increased per-patient costs that were not adequately reflected in Elevance's financial forecasts [2] Investor Information - Investors who purchased shares of Elevance Health, Inc. before April 2024 and still hold them are encouraged to reach out to the Shareholders Foundation for options regarding the lawsuit [1][3] - The Shareholders Foundation provides services related to shareholder issues and informs investors about securities class actions and legal news [3]

Economic Engagements - Brazil's Finance Minister Fernando Haddad is preparing for potential bilateral discussions at the upcoming G-20 meeting, indicating an active diplomatic agenda [2] - A recent conversation between President Lula and former President Trump was described as "good," suggesting opportunities for further talks with Bessent next week [2] Domestic Economic Indicators - Brazil's FGV Inflation IGP-DI for September showed a month-over-month increase of 0.36%, slightly below the estimated 0.40%, but an acceleration from the previous month's 0.20% [3] AI Economic Impact - San Francisco Federal Reserve President Mary Daly stated that an AI bubble is unlikely to destabilize the financial system, highlighting AI's potential to significantly enhance national productivity [4] - Daly noted no evidence of mass job displacement due to AI, suggesting a gradual impact on the labor market [5] Target Price Revisions - Wells Fargo has raised target prices for several major technology companies, including Microsoft (MSFT) to $675 from $650, and Advanced Micro Devices (AMD) to $275 from $185, reflecting strong confidence in their performance [6] - Other tech upgrades include Meta Platforms (META) with a target price increase to $837 from $811, and Alphabet Inc. (GOOG) to $236 from $187 [7] - In the healthcare sector, UnitedHealth Group (UNH) received a new target price of $400, up from $267, while Humana Inc. (HUM) was raised to $347 from $344, and Elevance Health, Inc. (ELV) to $412 from $330 [8]