Elevance Health Set to Report Q1 Earnings Amidst Market Challenges

With a market capitalization of $102.5 billion, Elevance Health, Inc. (ELV) is a prominent health benefits provider. The company delivers a broad array of medical, pharmacy, and healthcare services through its four divisions: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other. It operates under well-known brands like Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon.

Upcoming Earnings Report

Elevance Health is scheduled to disclose its fiscal Q1 2025 earnings before the market opens on Tuesday, April 22. Analysts anticipate that ELV will report a profit of $10.97 per share, representing a 3.1% increase from $10.64 per share in the same quarter last year. Notably, the company has exceeded Wall Street’s earnings estimates in three of the past four quarters, missing only once. In Q4 2024, Elevance Health outperformed the consensus EPS estimate by 1.1%.

Fiscal 2025 Projections

For fiscal 2025, analysts forecast an EPS of $34.17 for ELV, which indicates a 3.4% rise from the $33.04 reported in fiscal 2024. Looking further ahead, EPS is expected to increase by 14.2% year-over-year to $39.02 in fiscal 2026.

Market Performance Overview

Over the past 52 weeks, ELV stock has lagged behind broader market trends, with shares down 8.1%. This contrasts with the S&P 500 Index’s ($SPX) 1.9% gain and a slight dip in the Health Care Select Sector SPDR Fund’s (XLV) value during the same timeframe.

Challenges and Future Outlook

Though the company reported better-than-expected Q4 2024 adjusted EPS of $3.84 and operating revenues close to $45 billion on January 23, ELV shares experienced a modest decline the following day. The adjusted EPS reflected a decline of 31.7% year-over-year, while the Health Benefits segment reported a significant 75% decrease in operating gains, with the operating margin contracting by 150 basis points. A 2% drop in medical membership to 45.7 million further contributed to the disappointment, primarily driven by Medicaid disenrollment. Increased total expenses and a decline in net investment income added more pressure on financial results.

Additionally, management has indicated that both the Health Benefits and Carelon Services segments may face weaker margins in fiscal 2025, leading to cautious sentiment among investors.

Analyst Ratings

Despite these challenges, analysts have maintained a bullish stance on ELV, with a consensus rating categorized as a “Strong Buy.” Out of 20 analysts monitoring the Stock, the breakdown includes 15 “Strong Buys,” one “Moderate Buy,” and four “Holds.” The average analyst price target for ELV stands at $491.37, suggesting a potential upside of 10.8% from current trading levels.

On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data provided herein is solely for informational purposes. For more details, please see the Barchart Disclosure Policy here.

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