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Will Elevance (ELV) Beat Q1 Earnings on Carelon Strength?
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Elevance Health, Inc. (ELV - Free Report) is set to beat on earnings for the first quarter of 2024, the results for which are scheduled to be released on Apr 18, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter earnings per share of $10.52 suggests an 11.2% increase from the prior-year figure of $9.46. The consensus mark remained stable over the past week. The consensus estimate for first-quarter revenues of $42.4 billion indicates a 1.2% increase from the year-ago reported figure.
Elevance Health beat the consensus estimate for earnings in all the prior four quarters, with the average being 3.1%. This is depicted in the graph below:
Our proven model predicts a likely 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, which is precisely the case here.
Earnings ESP: Elevance Health has anEarnings ESP of +0.74%. This is because the Most Accurate Estimate is currently pegged at $10.60 per share, higher than the Zacks Consensus Estimate of $10.52. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Elevance Health currently has a Zacks Rank #2.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at ELV’s previous-quarter performance first.
Q4 Earnings Rewind
In the last reported quarter, this health benefits company’s adjusted earnings per share of $5.62 beat the Zacks Consensus Estimate by 1.3%, primarily due to improved premiums in the Commercial Health Benefits business and better performance in the Carelon Services business. However, the upside was partly offset by an elevated expense level.
Now, let’s see how things have shaped up prior to the first-quarter earnings announcement.
Factors Driving Q1 Performance
Elevance Health’s first-quarter revenues are likely to have benefited from higher product revenues and solid contributions from its Carelon and Health Benefits units. The rising memberships attributable to ELV’s Commercial Individual, Commercial Fee-based, Vision and Dental businesses are expected to have provided an impetus to the first quarter’s performance.
The Zacks Consensus Estimate for product revenues indicates 14.6% growth from the year-ago period’s $4 billion, whereas our model suggests a more than 13% increase. The consensus mark for Commercial Individual membership suggests 26.3% growth from a year ago. Similarly, the consensus estimate for Commercial Fee-based memberships indicates a 1.8% year-over-year jump, while our estimate hints at a 1.3% increase.
Its Health Benefits business is likely to have been driven by rate adjustments and overall membership growth. The Zacks Consensus Estimate for the segment’s operating income for the first quarter predicts a 4.7% year-over-year increase, whereas our model envisions a 3.5% growth.
Meanwhile, the Zacks Consensus Estimate for Carelon brand’s operating income for the first quarter indicates a 6.5% year-over-year increase, whereas our model predicts 5.9% growth. Growth in both Carelon Services and CarelonRx is expected to have aided the brand. The results are likely to have been supported by the increasing external pharmacy members served. These are likely to have positioned the company’s bottom line for not only a year-over-year increase but also an earnings beat.
However, its expenses are likely to have remained elevated in the quarter due to substantial investments in digital capabilities and platforms. High benefit expenses, cost of products sold, interest expenses and operating costs are likely to have led to higher total expenses. We expect total expenses to have jumped to more than $39.8 billion in the first quarter, partially reducing profit margins.
Also, declining memberships in total Medicare, Medicaid and Employer Group Risk-based are likely to have affected first-quarter premiums. The Zacks Consensus Estimate for premiums indicates a 1% decline from the year-ago period’s $35.9 billion, while our estimate suggests a 0.7% fall.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader Medical space, as our model shows that these, too, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for Inspire Medical’s bottom line for the to-be-reported quarter has improved by 3.1% over the past month. INSP beat earnings estimates in each of the past four quarters, the average surprise being 353.6%.
Edwards Lifesciences Corporation (EW - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank #2.
The Zacks Consensus Estimate for Edwards Lifesciences’ bottom line for the to-be-reported quarter indicates 3.2% year-over-year growth. EW beat earnings estimates in two of the past four quarters and met on the other occasions, with an average surprise of 0.8%.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +2.69% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Universal Health’s earnings per share for the to-be-reported quarter indicates a 33.3% year-over-year jump. UHS beat earnings estimates in each of the past four quarters, the average surprise being 5.9%.
Image: Bigstock
Will Elevance (ELV) Beat Q1 Earnings on Carelon Strength?
Elevance Health, Inc. (ELV - Free Report) is set to beat on earnings for the first quarter of 2024, the results for which are scheduled to be released on Apr 18, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter earnings per share of $10.52 suggests an 11.2% increase from the prior-year figure of $9.46. The consensus mark remained stable over the past week. The consensus estimate for first-quarter revenues of $42.4 billion indicates a 1.2% increase from the year-ago reported figure.
Elevance Health beat the consensus estimate for earnings in all the prior four quarters, with the average being 3.1%. This is depicted in the graph below:
Elevance Health, Inc. Price and EPS Surprise
Elevance Health, Inc. price-eps-surprise | Elevance Health, Inc. Quote
What the Quantitative Model Suggests
Our proven model predicts a likely 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, which is precisely the case here.
Earnings ESP: Elevance Health has anEarnings ESP of +0.74%. This is because the Most Accurate Estimate is currently pegged at $10.60 per share, higher than the Zacks Consensus Estimate of $10.52. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Elevance Health currently has a Zacks Rank #2.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at ELV’s previous-quarter performance first.
Q4 Earnings Rewind
In the last reported quarter, this health benefits company’s adjusted earnings per share of $5.62 beat the Zacks Consensus Estimate by 1.3%, primarily due to improved premiums in the Commercial Health Benefits business and better performance in the Carelon Services business. However, the upside was partly offset by an elevated expense level.
Now, let’s see how things have shaped up prior to the first-quarter earnings announcement.
Factors Driving Q1 Performance
Elevance Health’s first-quarter revenues are likely to have benefited from higher product revenues and solid contributions from its Carelon and Health Benefits units. The rising memberships attributable to ELV’s Commercial Individual, Commercial Fee-based, Vision and Dental businesses are expected to have provided an impetus to the first quarter’s performance.
The Zacks Consensus Estimate for product revenues indicates 14.6% growth from the year-ago period’s $4 billion, whereas our model suggests a more than 13% increase. The consensus mark for Commercial Individual membership suggests 26.3% growth from a year ago. Similarly, the consensus estimate for Commercial Fee-based memberships indicates a 1.8% year-over-year jump, while our estimate hints at a 1.3% increase.
Its Health Benefits business is likely to have been driven by rate adjustments and overall membership growth. The Zacks Consensus Estimate for the segment’s operating income for the first quarter predicts a 4.7% year-over-year increase, whereas our model envisions a 3.5% growth.
Meanwhile, the Zacks Consensus Estimate for Carelon brand’s operating income for the first quarter indicates a 6.5% year-over-year increase, whereas our model predicts 5.9% growth. Growth in both Carelon Services and CarelonRx is expected to have aided the brand. The results are likely to have been supported by the increasing external pharmacy members served. These are likely to have positioned the company’s bottom line for not only a year-over-year increase but also an earnings beat.
However, its expenses are likely to have remained elevated in the quarter due to substantial investments in digital capabilities and platforms. High benefit expenses, cost of products sold, interest expenses and operating costs are likely to have led to higher total expenses. We expect total expenses to have jumped to more than $39.8 billion in the first quarter, partially reducing profit margins.
Also, declining memberships in total Medicare, Medicaid and Employer Group Risk-based are likely to have affected first-quarter premiums. The Zacks Consensus Estimate for premiums indicates a 1% decline from the year-ago period’s $35.9 billion, while our estimate suggests a 0.7% fall.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader Medical space, as our model shows that these, too, have the right combination of elements to beat on earnings this time around:
Inspire Medical Systems, Inc. (INSP - Free Report) has an Earnings ESP of +18.04% 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 Inspire Medical’s bottom line for the to-be-reported quarter has improved by 3.1% over the past month. INSP beat earnings estimates in each of the past four quarters, the average surprise being 353.6%.
Edwards Lifesciences Corporation (EW - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank #2.
The Zacks Consensus Estimate for Edwards Lifesciences’ bottom line for the to-be-reported quarter indicates 3.2% year-over-year growth. EW beat earnings estimates in two of the past four quarters and met on the other occasions, with an average surprise of 0.8%.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +2.69% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Universal Health’s earnings per share for the to-be-reported quarter indicates a 33.3% year-over-year jump. UHS beat earnings estimates in each of the past four quarters, the average surprise being 5.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.