Back to top

Image: Bigstock

Can Anthem (ANTM) Pull a Surprise this Earnings Season?

Read MoreHide Full Article

Anthem Inc. is set to report second-quarter 2016 results before the market opens on Jul 27, 2016. Last quarter, the company had posted a positive earnings surprise of 3.59%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Operating revenues are expected to have improved in the second quarter on the back of strong enrollment in government business and Medicaid.

The total membership, both fully insured and self funded, are likely to have increased due to expansion of Affordable Care Act (ACA) and the streak of deal wins.

Prudent pricing for the exchange product offerings are expected to have contributed to better public exchange business in the to-be-reported quarter.

However, a still soft interest rate environment is likely to keep net investment income under pressure. Also, benefit expense ratio is expected to have increased owing on margin expansion.

With respect to the surprise trend, the company delivered positivesurprises in three of the last four quarters, with an average beat of 6.65%.

ANTHEM INC Price and EPS Surprise

ANTHEM INC Price and EPS Surprise | ANTHEM INC Quote

Earnings Whispers

Our proven model does not conclusively show that Anthem is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Anthem has -0.93% Earnings ESP. This is because the Most Accurate estimate stands at $3.21, while the Zacks Consensus Estimate is pegged at $3.24.

Zacks Rank: Anthem carries a Zacks Rank #3 (Hold).

Though the company carries a favorable Zacks Rank, its negative Earnings ESP makes surprise prediction difficult.

Stocks to Consider

Here are some companies from the Medical sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:  

Hologic Inc. (HOLX - Free Report) has an Earnings ESP of +2.13% and a Zacks Rank #2. The company is also expected to report second-quarter earnings results on Jul 27.

Centene Corp.(CNC - Free Report) has an Earnings ESP of +1.85% and a Zacks Rank #2. The company is scheduled to report second-quarter earnings results on Jul 26.

Innoviva Inc (INVA - Free Report) has an Earnings ESP of +25% and a Zacks Rank #1. The company is slated to report second-quarter earnings results on Jul 28.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Hologic, Inc. (HOLX) - free report >>

Centene Corporation (CNC) - free report >>

Innoviva, Inc. (INVA) - free report >>

Published in