Elevance Health Inc.
ELV
is set to continue its earnings beat streak in second-quarter 2022, results of which are expected to be released on Jul 20, before the opening bell.
In the last reported quarter, the health benefits company’s adjusted earnings per share of $8.25 beat the Zacks Consensus Estimate of $7.81 by 5.6%, primarily due to solid performances by its divisions and higher Medicaid, Medicare Advantage, and Commercial risk-based membership growth. The buyouts of MMM and Paramount contributed to improved premiums, which were partly offset by elevated costs.
Let’s see how things have shaped up prior to the
second-quarter earnings
announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter earnings per share of $7.73 has witnessed four upward revisions and no downward movement in the past 30 days. The estimate is indicative of a 10% increase from the year-ago reported figure. Similarly, the Zacks Consensus Estimate for second-quarter revenues is pegged at $38.1 billion, suggesting a jump of 14.6% from the year-ago reported figure.
Elevance Health beat earnings estimates in each of the trailing four quarters, delivering an average of 6%. This is depicted in the graph below.
Elevance Health, Inc. Price and EPS Surprise
Elevance Health, Inc. price-eps-surprise
|
Elevance Health, Inc. Quote
What the Quantitative Model Suggests
Our proven model predicts an earnings beat for Elevance Health this time around as well. The combination of a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP:
Earnings ESP for the company is currently +0.43%. The Most Accurate Estimate is pegged at $7.76 per share, higher than the Zacks Consensus Estimate of $7.73. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
Zacks Rank:
Elevance Health currently holds a Zacks Rank #3.
Factors Driving Better-Than-Expected Earnings
Elevance Health’s second-quarter revenues are likely to have benefitted from higher premiums and solid contributions by its health benefits businesses and services units. The rising membership attributable to ELV’s Medicare and Medicaid businesses is expected to have provided an impetus to the to-be-reported quarter’s performance.
The medical membership of Elevance Health might have increased in the to-be-reported quarter, driven by its Government and Commercial Businesses. The increased membership in the Medicaid and Medicare Advantage businesses, when combined with ELV’s buyout of MMM and Integra Managed Care, is expected to have benefited the health insurer’s Government Business.
Meanwhile, its Commercial Business is likely to have been driven by the robust growth in risk-based areas. This is expected to have positioned the company’s bottom line for year-over-year growth and a beat in the to-be-reported quarter.
Significant portions of the 2022 guidance are expected to have been realized by the company in the second quarter. Earlier, ELV’s management stated that for the full-year 2022, medical enrollment was projected in the range of 45.6 million to 46.2 million. Investment income was forecasted to be $1.1 billion. Also, Elevance Health anticipates its operating cash flow to be more than $6.9 billion.
Prudent capital deployment measures might also have aided the results of Elevance Health in the second quarter. However, its expenses are likely to have remained elevated in the second quarter due to substantial investments in innovation and digital advancements.
Other Stocks That Warrant a Look
Here are some other companies from the
Medical
space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
Affimed N.V.
AFMD
has an Earnings ESP of +16.67% and a Zacks Rank #2. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
The Zacks Consensus Estimate for Affimed’s bottom line for the to-be-reported quarter indicates a 5.3% improvement from the year-ago period. AFMD witnessed four upward estimate revisions in the past 60 days compared with one in the opposite direction.
Centene Corporation
CNC
has an Earnings ESP of +1.42% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Centene’s earnings per share for the to-be-reported quarter is pegged at $1.69, implying a 35.2% improvement from the year-ago figure. CNC witnessed five upward estimate revisions in the past 30 days compared with none in the opposite direction.
Ascendis Pharma A/S
ASND
has an Earnings ESP of +1.35% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Ascendis Pharma’s bottom line for the to-be-reported quarter indicates a 29.6% improvement from a year ago. The consensus mark for ASND’s top line is pegged at $7.6 million, indicating a significant jump from $1.2 million a year ago.
Stay on top of upcoming earnings announcements with the
Zacks Earnings Calendar
.
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