Financial Data and Key Metrics Changes - Elevance Health reported adjusted diluted earnings per share of $3.33 for Q4 2025 and $30.29 for the full year, with fourth quarter results benefiting from greater tax favorability than anticipated [15] - Operating revenue for Q4 totaled $49.3 billion, an increase of 10% from the prior year, driven by premium rate adjustments and acquisitions [16] - The consolidated benefit expense ratio was 93.5% for Q4 and 90% for the full year, in line with guidance [16] Business Line Data and Key Metrics Changes - Medicaid operating margin is expected to be approximately -1.75% for 2026, with improvement anticipated over time as rates incorporate more current experience [6] - Medicare Advantage membership is expected to decline in the high teens percentage range in 2026, reflecting deliberate portfolio actions [7] - The commercial business showed healthy momentum, particularly in national accounts, supported by a productive selling season and favorable client retention [8] Market Data and Key Metrics Changes - The company ended the year with 45.2 million members, a decrease of approximately 500,000 year-over-year, primarily due to a decline in Medicaid membership [16] - The individual ACA market is expected to see membership at least 900,000 by year-end 2026, reflecting the expiration of enhanced premium tax credits [70] Company Strategy and Development Direction - The company views 2026 as a year of execution and repositioning, with a focus on improving margins and reducing volatility [4] - The long-term earnings growth algorithm is reaffirmed at least 12% adjusted EPS growth annually on average over time, with expectations to return to this level in 2027 [22] - The company is recalibrating long-term margin targets to reflect the current portfolio and expected future evolution [23] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of affordability in healthcare and the need for prudent planning assumptions in a dynamic environment [4] - The company is confident in its long-term algorithm and expects to return to at least 12% adjusted EPS growth in 2027, supported by diversified earnings power [13] - Management acknowledged the challenges posed by the current operating environment but remains focused on disciplined execution and targeted investments [10] Other Important Information - The company plans to allocate approximately $2.3 billion towards share repurchases in 2026, reflecting a balanced approach to capital allocation [22] - Operating cash flow was $4.3 billion for the year, with expectations for at least $5.5 billion in 2026 [19] Q&A Session Summary Question: Cost trend across major lines of business - Management indicated that cost trends in commercial, Medicaid, and Medicare are expected to remain elevated but stable, with some variations by line of business [25][27] Question: Membership declines during AEP - Management explained that membership declines were larger than expected, particularly in Medicare, due to deliberate repositioning towards margin stability [31][34] Question: Medicaid margin drivers - Management noted that Medicaid margins were slightly better than expected in Q4 due to favorable prior period development and modest retroactive rates [40] Question: Rate outlook for Medicaid - Management anticipates a composite rate increase in the mid-single-digit percentage range for 2026, but rates will still lag trend due to ongoing membership attrition [46] Question: Long-term EPS growth confidence - Management expressed confidence in achieving at least 12% adjusted EPS growth starting in 2027, driven by disciplined execution and multiple independent levers [52][55] Question: Capital deployment priorities - Management stated that near-term capital allocation will reflect a conservative posture, focusing on integration and execution rather than new M&A activity [75]

Core Viewpoint - Humana's stock experienced a significant decline of 21% following the CMS's announcement of a minimal rate increase for 2027, highlighting the company's vulnerability as a "pure play" on Medicare Advantage, which constitutes approximately 85% of its operations [2] Financial Performance - Humana's Q3 2025 revenue was reported at $32.65 billion, reflecting an 11% year-over-year increase, while adjusted EPS for the same period was $3.24, down 22% year-over-year [2] - The medical benefit ratio for Q3 2025 stood at 91.1%, indicating limited profitability potential, as ratios above 90% are generally unfavorable [3] - The company anticipates a full-year 2025 adjusted EPS of around $17.00, with a projected benefit ratio between 90.1% and 90.5% [3] Membership Trends - Humana is facing a decline in Medicare Advantage membership, with an expected loss of approximately 425,000 members in 2025 due to withdrawal from unprofitable markets [3] Star Ratings Impact - Humana's Star Ratings, which influence bonus payments from CMS, have significantly dropped for the bonus year 2027, leading to reduced reimbursements and a competitive disadvantage compared to peers like UnitedHealth [5] Valuation Insights - Following the recent stock decline, Humana is trading at around $209 per share, approximately 13 times the estimated 2026 EPS, which appears slightly undervalued compared to historical multiples of 16-18 times [6] - The company is focusing on operational efficiencies and aims to achieve over $100 million in savings through AI and outsourcing [6] Future Projections - Analysts project a loss of $4.00 per share for Q4 2025, contrasting with a loss of $2.16 in Q4 2024, reflecting the challenges in addressing the Star Ratings issue [7] - The company is implementing a "reset" strategy for 2025-2026, but its effectiveness remains unproven amid regulatory challenges [8] Investment Outlook - The investment view suggests that Humana presents a high-risk profile until Q4 results and final 2027 rates are disclosed, with a 35% analyst upside projection considered optimistic given existing structural hurdles [9]

Core Viewpoint - CVS experienced a significant stock drop of 14% following a disappointing 0.09% rate increase announcement for 2027 by CMS, which fell short of investor expectations of 4-6% [2][3] Financial Performance - CVS's revenue for 2025 is projected to exceed $400 billion, with adjusted operating income estimated between $14.22 billion and $14.39 billion [12] - The company reported an adjusted EPS of $1.60 for Q3 2025, surpassing estimates of $1.36 [11] - Aetna's medical loss ratio improved to 87.3% from 90.4% in Q3 2024, indicating stabilization in their insurance business [11][6] Business Segments - Approximately 33% of CVS's revenue comes from premiums, making it less vulnerable to Medicare Advantage challenges compared to competitors like Humana [3] - CVS operates a diversified business model, including retail pharmacies (9,000 locations), Pharmacy Benefit Management (CVS Caremark with 87 million members), and Aetna [2] Strategic Challenges - CVS recorded a $5.7 billion goodwill impairment charge in Q3 2025 related to its acquisition of Oak Street Health, indicating difficulties in executing its healthcare delivery strategy [6][9] - The company is terminating 16 Oak Street clinics and adjusting its growth strategy due to the underperformance of this acquisition [9] Market Outlook - CVS's guidance indicates expectations for margin improvement despite stable revenue, suggesting operational efficiency gains alongside Aetna's stabilization [7] - The 2027 Medicare rate proposal is expected to pressure Aetna's margins, raising concerns about the impact on CVS's overall performance [8] Valuation Metrics - CVS's current stock price is $72, with a forward P/E ratio of 10.2x, which is considered inexpensive compared to its historical trading range of 12-15x [13][14] - The company is projected to generate robust operating cash flow of $7.5 billion to $8.0 billion in 2025, with a quarterly dividend of $0.665 per share, yielding 3.3% [15] Investment Perspective - CVS offers a higher level of diversification compared to competitors like UnitedHealth and Humana, making it a more balanced investment option despite the complexities involved [16][17] - The stock's current valuation reflects ongoing challenges but does not indicate a catastrophic outlook, making it an attractive option for investors seeking exposure to the healthcare sector with less regulatory risk [17]

Now you can get access to the latest and highest-quality analysis of recent Wall Street buying and selling ideas with just one subscription to Beyond the Wall Investing ! There is a free trial and a special discount of 10% for you. Join us today!My first-ever article on UnitedHealth ( UNH ) came out in mid-May 2025 , right after the stock's heavy drop on pulling its guidance and replacing the previousDaniel Sereda is chief investment analyst at a family office whose investments span continents and diverse a ...

3 Strategic Focus Areas Elevance Health 4Q 2025 Earnings Presentation January 28, 2026 Key Highlights 1 2025 Results Elevance Health fourth quarter operational results consistent with expectations 2 2026 Guidance & 2027 Outlook 2026 adjusted diluted EPS1 guidance of at least $25.50 2027 adjusted diluted EPS1 to grow at least 12%, off our ending 2026 earnings baseline Fourth Quarter & Full Year 2025 Results | Elevance Health | 4Q 2025 | 4Q 2024 | Change | 2025 | 2024 | Change | | --- | --- | --- | --- | --- ...

Expects UHC, Medicare Advantage contraction will be in the range of 1.3 million to 1.4 million members for the full year, including Group, individual and dual special needs plans, greater losses than anticipated. Says competitive market dynamics drove higher than expected. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See today’s best-performing stocks on TipRanks >> Read More on UNH: Disclaimer & DisclosureReport an Issue ...

Looking to 2027, says the advance notice published yesterday “simply doesn’t reflect the reality of medical utilization and cost trends.” UnitedHealth (UNH) says it will continue to work with CMS to “ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors benefits and access to care that would be a deeply unfortunate result for a program that already is underfunding pressure from the previous administration.” Published first on TheFly – the ultimate source for ...

分组1 - UnitedHealth's Q4 earnings release triggered a significant sell-off across the healthcare industry, impacting companies like Centene, which has notable exposure to governmental healthcare programs, albeit less than UnitedHealth [1] - The sell-off reflects broader market concerns regarding the performance and outlook of healthcare stocks following UnitedHealth's results [1] 分组2 - The article emphasizes the importance of fundamental analysis in making informed investment decisions, highlighting the author's experience in managing a family portfolio and understanding the balance between risk and reward [1] - The author aims to provide accessible insights for investors of all experience levels, leveraging a background in IT to navigate complexities in technology stocks while also exploring diverse sectors for investment opportunities [1]

分组1 - UnitedHealth's Q4 earnings release triggered a significant sell-off across the healthcare industry, impacting companies like Centene, which has notable exposure to governmental healthcare programs, albeit less than UnitedHealth [1] - The sell-off reflects broader market concerns regarding the performance and outlook of healthcare stocks following UnitedHealth's results [1] 分组2 - The article emphasizes the importance of fundamental analysis in making informed investment decisions, highlighting the author's experience in managing a family portfolio and understanding the balance between risk and reward [1] - The author aims to provide accessible insights for investors of all experience levels, leveraging a background in IT to navigate complexities in technology stocks and other sectors [1]

Market Overview - Futures are trading higher after a volatile day on Wall Street, with the tech-heavy Nasdaq rising significantly while the Dow Jones Industrials fell due to a nearly 20% drop in UnitedHealth Group following a weak Medicare reimbursement rate proposal for 2027 [2] - The Dow Jones closed at 49,003, down 0.83%, while the S&P 500 reached a record high of 6,978, up 0.41%, and the Nasdaq finished at 23,817, up 0.91% [2] Treasury Bonds - Mixed yields were observed across the Treasury curve, with profit-taking on longer maturities and buying interest in shorter maturities and T-bills [3] - The 30-year bond closed at 4.84%, and the benchmark 10-year note was last at 4.23% [3] Oil and Gas - Energy prices increased due to severe weather disrupting operations and geopolitical issues, with crude export flows from Gulf Coast ports temporarily halting [4] - Brent Crude finished at $67.53, up 2.96%, and West Texas Intermediate closed at $62.42, up 2.95% [4] - Natural gas prices fell to $6.58, down 3.2%, after a significant increase over the past week [4] Precious Metals - Gold prices rose by 3.4% to finish at $5,186, while silver increased by 8.32% to $112.41, driven by liquidity and limited supply [5] - BMO's precious metals team projects gold to reach $8,650 and silver to $220 by 2027 [5] Cryptocurrency - The crypto market remained stagnant with low volume and liquidity, as investors preferred precious metals over digital assets [6] - Bitcoin was trading at $89,745, and Ethereum was quoted at $3,024 [7]