Yahoo Finance Elevance Health (ELV) to Post Q1 Earnings: What's in Store?
Elevance Health Inc. ELV is set to report its first-quarter 2023 results on Apr 19, before the opening bell.
In the last reported quarter, the health benefits company’s adjusted earnings per share of $5.23 beat the Zacks Consensus Estimate of $5.20 by 0.6%, primarily due to growing premiums stemming from rate increases coupled with membership growth across its Medicaid and Medicare Advantage businesses.
Additionally, higher consumers served and increased utilization of prescription drugs, paving way for improved pharmacy product revenues across ELV’s CarelonRx unit, contributed to the upside. However, the upside was partly offset by an elevated expense level.
Let’s see how things have shaped up before the first-quarter earnings announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter earnings per share of $9.30 suggests a 12.7% increase from the prior-year figure of $8.25 while our estimate suggests 11.8% year-over-year growth. The consensus mark remained stable over the past month. The consensus estimate for first-quarter revenues of $40.9 billion indicates an 8% increase from the year-ago reported figure while our estimate suggests 7.6% year-over-year growth.
Elevance Health beat the consensus estimate for earnings in all the prior four quarters, with the average being 4.1%. This is depicted in the graph below:
Elevance Health, Inc. Price and EPS Surprise
Elevance Health, Inc. price-eps-surprise | Elevance Health, Inc. Quote
Factors to Note
Elevance Health’s first-quarter revenues are likely to have benefited from higher premiums and solid contributions by its Commercial & Specialty Business and Government Business units. The rising memberships attributable to ELV’s Medicare Advantage business are expected to have provided an impetus to the first quarter’s performance.
The increased memberships are expected to have benefited the health insurer’s Government Business. The Zacks Consensus Estimate for Government Business’ operating revenues for the first quarter indicates a 7.2% year-over-year increase. Our estimate suggests that the segment’s revenues will improve 5.3% year over year.
Meanwhile, its Commercial & Specialty Business is likely to have been driven by robust growth in Individual areas. The Zacks Consensus Estimate for the segment’s operating revenues for the first quarter indicates a 6.2% year-over-year increase while our estimate suggests 12.5% growth from a year ago.
While the consensus estimate predicts a 16% improvement in operating income in the first quarter, our estimate suggests a 30.5% increase. This is likely to have positioned the company’s bottom line for a year-over-year increase in the to-be-reported quarter.
The Zacks Consensus Estimate for total premiums indicates 7% growth from the year-ago period while our estimate suggests a 7.5% increase in the first quarter. Our estimate for gross profits indicates an 11.3% increase in the March quarter.
However, the consensus mark for net investment income indicates a 0.4% year-over-year decrease in the quarter under review. Its expenses are likely to have remained elevated in the quarter due to substantial investments in digital capabilities and platforms. We expect total expenses to have jumped 7.5% year over year in the first quarter, slightly reducing profit margins, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Elevance Health this time around. 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. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -1.30%. This is because the Most Accurate Estimate currently stands at $9.18 per share, lower than the Zacks Consensus Estimate of $9.30 per share.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Elevance Health currently carries a Zacks Rank #2.
Stocks to Consider
While an earnings beat looks uncertain for Elevance Health, here are some companies from the broader medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Bio-Rad Laboratories, Inc. BIO has an Earnings ESP of +0.16% and is a Zacks #1 Ranked player.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Bio-Rad’s earnings per share for the to-be-reported quarter is pegged at $3.24, which remained stable over the past week. BIO beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 27.5%.
AstraZeneca PLC AZN has an Earnings ESP of +2.96% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZeneca’s bottom line for the to-be-reported quarter is pegged at 85 cents per share, which witnessed one upward estimate revision in the past month against none in the opposite direction. AZN beat earnings estimates in all the past four quarters, the average surprise being 7.8%.
Amgen Inc. AMGN has an Earnings ESP of +14.54% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Amgen’s bottom line for the to-be-reported quarter is pegged at $3.93 per share, which increased by a penny over the past month. AMGN beat earnings estimates in all the past four quarters, the average being 3.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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AstraZeneca PLC (AZN) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Bio-Rad Laboratories, Inc. (BIO) : Free Stock Analysis Report
Elevance Health, Inc. (ELV) : Free Stock Analysis Report
