Core Insights - Elevance Health, Inc. (ELV) reported Q4 2025 adjusted EPS of $3.33, exceeding the Zacks Consensus Estimate by 7.3% and reflecting a 3.1% year-over-year increase [2] - Operating revenues increased by 9.6% year over year to $49.3 billion, although this figure fell short of consensus estimates by 0.5% [2] Financial Performance - The quarterly earnings were bolstered by strong premium growth, with premiums totaling $40.7 billion, a 12.3% year-over-year increase [5][10] - The Carelon division experienced a significant revenue increase of 27% year over year, reaching $18.7 billion, driven by acquisitions and scaling risk-based services [10][11] - Health Benefits segment revenues rose 11% year over year to $41.8 billion, surpassing estimates [8] Membership and Enrollment - Medical membership stood at approximately 45.2 million as of December 31, 2025, a decline of 1.1% year over year, primarily due to a drop in Medicaid membership [4] - Medicare Advantage membership growth partially offset the decline in overall medical membership [4] Expenses and Margins - Total expenses increased by 10.5% year over year to $49.5 billion, exceeding estimates [6] - The adjusted operating margin deteriorated by 110 basis points year over year to 0.8% [6] Cash Flow and Capital Deployment - Elevance Health reported cash and cash equivalents of $9.5 billion, a 14.5% increase from the end of 2024 [13] - The company generated net cash flow from operations of $4.3 billion in 2025, a decline of 26.1% from the previous year [14] - Share buybacks amounted to $471 million in Q4, with a remaining capacity of approximately $6.7 billion [15] Full-Year Results and Outlook - For the full year 2025, revenues reached $197.6 billion, up from $175.2 billion in 2024, driven by increased premium yields [16] - The company anticipates adjusted EPS for 2026 to be at least $25.50, indicating a 15.8% decline from 2025 [17] - Operating revenues are expected to see a low-single digit decline in 2026, with medical enrollment projected between 43.2 million and 43.9 million [18]

Earnings Overview - Elevance Health reported fourth-quarter 2025 revenues of $49.3 billion, a 10% increase year over year, but below the consensus estimate of $49.82 billion [1] - The operating revenue for the full year 2025 was $197.6 billion, reflecting a 13% increase [1] - Adjusted earnings per share for the fourth quarter were $3.33, surpassing the consensus of $3.10 [2] Expense Ratios - The benefit expense ratio for the fourth quarter was 93.5%, an increase of 110 basis points, attributed to higher medical costs in Affordable Care Act plans and Medicare Part D seasonality [2] - For the full year, the benefit expense ratio was 90%, up 150 basis points year over year [2] - The operating expense ratio was 11% in the fourth quarter and 10.6% for the full year [3] Segment Performance - The Health Benefits segment generated operating revenue of $41.8 billion in Q4 2025, an 11% increase driven by higher premium yields and Medicare Advantage membership growth [4] - Medical membership totaled approximately 45.2 million as of December 31, 2025, a 1% decrease year over year due to Medicaid attrition [4] - Carelon's operating revenue was $18.7 billion, up 27%, driven by growth in CarelonRx and the acquisition of CareBridge [5] Future Guidance - For fiscal 2026, Elevance Health expects adjusted earnings to be at least $25.50 per share, below the Wall Street estimate of $26.90 [9] - The company forecasts a mid-single-digit decline in sales due to lower premiums and anticipates a benefit expense ratio of 90.2% +/- 50 basis points [9] - Year-end medical enrollment is projected to be between 43,175 and 43,875, down from 45,232 in 2025 [9] Market and Regulatory Environment - The company anticipates a significant decline in Medicare Advantage membership, projected to be in the high teens percentage range for 2026 [7] - Concerns were raised regarding the proposed payment rates for Medicare in 2027, which are expected to be significantly lower than anticipated [10]

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]

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 | | --- | --- | --- | --- | --- ...

Core Insights - Elevance Health reported a fourth quarter net income of $547 million, reflecting ongoing challenges with healthcare costs impacting earnings [2][3] - The company is the second-largest health insurer in the U.S., operating under the Anthem brand and managing Medicaid contracts [4] Financial Performance - Net income increased by 31% to $547 million, or $2.47 per share, compared to $418 million, or $1.81 per share, in the previous year [8] - Total revenues rose by 9.5% to $49.7 billion, with operating revenue up 10% to $49.3 billion, driven by higher premium yields and growth in Medicare Advantage membership [9][8] Cost and Expense Ratios - The benefit expense ratio increased to 93.5% in the fourth quarter, up from 91.3% in the third quarter, indicating rising medical costs [6][8] - For the full year, the benefit expense ratio was 90.0%, an increase of 150 basis points year-over-year, attributed to elevated medical cost trends [7] Membership and Market Position - Elevance ended 2025 with 45.2 million health plan members, a 1% decrease from the previous year, primarily due to attrition in the Medicaid segment [9] - The company continues to expand its Carelon health services business, with operating revenue increasing by 27% to $18.7 billion [10] Strategic Focus - The CEO emphasized a commitment to improving affordability and access to healthcare, aiming for at least 12% adjusted earnings per share growth by 2027 through pricing discipline and targeted investments [10]

Core Insights - Elevance Health reported fourth quarter and full year 2025 results, showing disciplined execution in a dynamic environment and a focus on advancing affordability and healthcare accessibility for members [2][4]. Financial Performance - Operating revenue for Q4 2025 was $49.3 billion, a 10% increase from Q4 2024, while total operating revenue for 2025 reached $197.6 billion, up 13% year-over-year [4][11]. - The operating gain for Q4 2025 was $0.3 billion, with an adjusted operating gain of $0.4 billion, reflecting a decrease compared to the previous year [4][12]. - The benefit expense ratio increased to 93.5% in Q4 2025, up 110 basis points from the prior year, driven by higher medical costs [5][25]. Segment Performance - The Health Benefits segment generated $41.8 billion in operating revenue for Q4 2025, an 11% increase compared to Q4 2024, with a full year revenue of $167.1 billion, also up 11% [10][11]. - Carelon segment reported operating revenue of $18.7 billion in Q4 2025, a significant increase of 27% year-over-year, driven by growth in CarelonRx and Carelon Services [15][29]. Membership Metrics - Medical membership totaled approximately 45.2 million as of December 31, 2025, a decrease of 0.5 million or 1% year-over-year, primarily due to attrition in the Medicaid business [13][22]. Cash Flow and Shareholder Returns - Operating cash flow for 2025 was $4.3 billion, approximately 0.8 times GAAP net income, with cash and investments at the parent company totaling $2.6 billion as of December 31, 2025 [8][26]. - The company repurchased 1.4 million shares for $471 million in Q4 2025 and declared a quarterly dividend of $1.71 per share, totaling $377 million in cash distribution [9][17].

Core Viewpoint - Elevance Health, Inc. (ELV) is expected to report its fourth-quarter 2025 results on January 28, 2026, with earnings estimated at $3.10 per share and revenues of $49.59 billion [1] Financial Performance - The fourth-quarter earnings estimate has seen one downward revision and no upward revisions in the past month, indicating a year-over-year decline of 19.3% in earnings, while revenues are projected to increase by 10.2% year-over-year [2] - For the full year 2025, the Zacks Consensus Estimate for Elevance's revenues is $197.98 billion, reflecting a 13% year-over-year increase, while the EPS estimate is $29.99, showing a 9.2% year-over-year decrease [3] Earnings Prediction - The current Earnings ESP for Elevance is -1.41%, and it holds a Zacks Rank of 4 (Sell), suggesting that an earnings beat is unlikely this quarter [4] Revenue Drivers - The consensus estimate for product revenues indicates a 1.5% growth from the previous year's $6.7 billion, while premiums are expected to rise by 12.3% year-over-year, contributing to overall sales growth [5] - The estimate for Commercial Individual membership suggests a 3.5% growth year-over-year, although Commercial Fee-based memberships are projected to decline by 0.4% [6] Operating Income - The Zacks Consensus Estimate for Carelon brand's operating income indicates an 8.9% year-over-year increase, driven primarily by growth in CarelonRx, while the Health Benefits segment's operating income is expected to rise by 12.1% [7] Expense Outlook - Elevated expenses are anticipated due to significant investments in digital capabilities, with total expenses expected to increase by 8.4% year-over-year in the fourth quarter [8]

Group 1 - Elevance Health, Inc. (NYSE:ELV) is considered a cheap healthcare stock with a median price target of $394, indicating an upside potential of 19.12% [1] - TD Cowen raised the price target for Elevance Health to $400 from $380, maintaining a 'Buy' rating and highlighting it as their "Best Idea for 2026" [2] - Mizuho reduced its price target for Elevance Health to $400 from $420 while keeping an 'Outperform' rating, also lowering earnings guidance for 2026 and 2027 due to challenges in Carelon [3] Group 2 - Elevance Health operates through four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other, and aims to simplify the healthcare system [4]

Core Insights - Elevance Health, Inc. (ELV) reported Q3 2025 adjusted EPS of $6.03, exceeding the Zacks Consensus Estimate by 21.1%, despite a 29.9% year-over-year decline [1][9] - Operating revenues increased by 12% year-over-year to $50.1 billion, surpassing the consensus mark by 1.2% [1][4] Financial Performance - Premiums reached $41.8 billion, a 13.5% increase year-over-year, exceeding both the consensus estimate of $41 billion and the internal estimate of $40.2 billion [4] - Product revenues grew 4.6% year-over-year to $6.2 billion, slightly missing the Zacks Consensus Estimate of $6.3 billion but beating the internal estimate of $6.1 billion [4] - Net investment income rose 13.4% year-over-year to $625 million, surpassing the consensus mark of $449 million and the internal estimate of $476.5 million [5] - Total expenses increased by 12.7% year-over-year to $49.3 billion, exceeding the internal estimate of $47.7 billion [5] Segment Performance - Health Benefits segment reported operating revenues of $42.2 billion, a 10% increase year-over-year, beating the consensus estimate of $41.5 billion [7] - Carelon segment's operating revenues surged 33% year-over-year to $18.3 billion, exceeding both the consensus estimate of $18 billion and the internal estimate of $17.4 billion [9] - Corporate & Other segment's operating revenues more than doubled year-over-year to $149 million, with an operating loss of $81 million, narrower than the previous year's loss of $999 million [11] Membership and Enrollment - Medical membership stood at approximately 45.4 million as of September 30, 2025, a 0.9% decline year-over-year, primarily due to a decrease in Medicaid membership [3] Cash Flow and Capital Deployment - Cash and cash equivalents were $8.7 billion, a 5.1% increase from the end of 2024 [12] - Elevance Health repurchased shares worth $875 million in Q3 2025, with a remaining capacity of approximately $7.2 billion under its buyback authorization [14] 2025 Outlook - The company maintains its adjusted EPS guidance at around $30, indicating a 9.2% decline from 2024 [15] - Medical enrollment is forecasted to be between 45.8 million and 46.6 million in 2025 [16]

Financial Data and Key Metrics Changes - Elevance Health reported third quarter GAAP diluted earnings per share of $5.32 and adjusted diluted earnings per share of $6.03, reflecting enhanced medical cost management and expense discipline [14][15] - Total operating revenue for the quarter was $50.1 billion, up 12% year over year, driven by higher premium yields and growth in Medicare Advantage membership [15] - The consolidated benefit-expense ratio was 91.3%, aligned with expectations, while Medicaid performance faced pressure from elevated acuity and utilization [15][16] Business Line Data and Key Metrics Changes - In Medicare Advantage, approximately 55% of members will be in four-star or higher contracts for the 2027 payment year, up from about 40% for 2026, indicating improvement in STAR ratings [8] - CarelonRx revenue grew 20% year over year, driven by strong momentum with large clients, while Carelon Services grew by more than 50% [17] - The ACA market is experiencing higher acuity, and the anticipated expiration of enhanced subsidies could significantly impact membership in 2026 [9][10] Market Data and Key Metrics Changes - Medicaid operating margin is expected to be modestly negative for 2025, with a decline of at least 125 basis points anticipated for 2026 due to elevated acuity and utilization trends [16][20] - The company expects a high single-digit decline in full-year operating margin for the ACA market, while commercial group business margins remain consistent with prior expectations [16][50] Company Strategy and Development Direction - The company is focused on lowering the total cost of care and improving member experience through an integrated clinical and benefits approach, leveraging value-based care [6][10] - Elevance Health is committed to disciplined capital allocation, balancing investment and growth with consistent shareholder returns, including share repurchases [12][13] - The company is investing in technology, particularly AI, to enhance member and provider experiences, aiming for long-term growth [34][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by rising medical and pharmacy costs and regulatory changes impacting coverage for millions of Americans [6] - The company is approaching 2026 with a prudent and practical posture, setting expectations that reflect current realities and uncertainties [7][22] - Management is confident in the strategy and execution, aiming for sustainable value for stakeholders despite a dynamic external environment [13][22] Other Important Information - The company is expanding external relationships and scaling pharmacy, behavioral health, and specialty care management, embedding value-based care principles throughout [9][10] - By year-end, over 10 million members will have access to the AI-enabled virtual assistant, enhancing access and engagement [11] Q&A Session Summary Question: Medicaid margin outlook and state discussions - Management discussed the expectation of a 125 basis point decline in Medicaid margins for 2026, driven by elevated acuity and utilization trends, and noted constructive conversations with states regarding rate adequacy [24][28][27] Question: Investment spending impact on 2026 - Management clarified that several hundred million dollars of investment is planned for technology adoption, Carelon expansion, and operational initiatives, which are expected to enhance long-term growth [32][34] Question: ACA membership impact from subsidy expiration - Management indicated that if enhanced subsidies expire, a material contraction in the ACA marketplace is expected, leading to lower enrollment and higher premium increases [41][45] Question: Medicaid membership outlook - Management anticipates a modest decline in Medicaid membership for 2026 due to ongoing re-verification processes and state program changes [75][76] Question: Medicaid coding trends and provider engagement - Management is actively working with providers to ensure accurate clinical documentation and is taking steps to improve oversight and compliance [81][84]