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Anthem (ANTM) Q3 Earnings: Disappointment in the Cards?
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Anthem Inc. is set to report third-quarter 2016 results, before the market opens, on Nov 2.
Last quarter, the company posted a positive earnings surprise of 2.78%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Anthem’s Public Exchange business is expected to perform well in the to-be-reported quarter owing to its competitive edge despite the risks involved in this new market.
Total membership, including both fully insured and self funded, are likely have been boosted by solid expansion of Affordable Care Act (ACA).However, fully insured membership losses in Commercial business might partially offset the upside.
Government Business is also expected to have witnessed robust enrollment growth. Medicaid Business is likely to have tapped the huge opportunities available in the market, resulting in an improvement in margin.
Consequent to membership growth, operating revenues are likely have improved in the third quarter.
The company’s focus on addressing the challenges of rising healthcare costs and the quality of healthcare is expected to have led to the introduction of more customer-centric healthcare solutions.
In addition, a persistent soft interest rate environment is likely to keep net investment income under pressure. Also, benefit expense ratio is expected to increase owing on margin expansion.
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 a Earnings ESP of -2.01%. This is because the Most Accurate estimate stands at $2.44, while the Zacks Consensus Estimate is pegged at $2.49. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Anthem carries a Zacks Rank #4 (Sell).
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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:
WellCare Health Plans Inc., which is expected to report third-quarter earnings results on Nov 1, has an Earnings ESP of +3.6% and a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Humana Inc.(HUM - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #2 (Buy). The company is expected to report third-quarter earnings results on Nov 4.
Ariad Pharmaceuticals Inc.has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is slated to report third-quarter earnings results on Nov 1.
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Anthem (ANTM) Q3 Earnings: Disappointment in the Cards?
Anthem Inc. is set to report third-quarter 2016 results, before the market opens, on Nov 2.
Last quarter, the company posted a positive earnings surprise of 2.78%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Anthem’s Public Exchange business is expected to perform well in the to-be-reported quarter owing to its competitive edge despite the risks involved in this new market.
Total membership, including both fully insured and self funded, are likely have been boosted by solid expansion of Affordable Care Act (ACA).However, fully insured membership losses in Commercial business might partially offset the upside.
Government Business is also expected to have witnessed robust enrollment growth. Medicaid Business is likely to have tapped the huge opportunities available in the market, resulting in an improvement in margin.
Consequent to membership growth, operating revenues are likely have improved in the third quarter.
The company’s focus on addressing the challenges of rising healthcare costs and the quality of healthcare is expected to have led to the introduction of more customer-centric healthcare solutions.
In addition, a persistent soft interest rate environment is likely to keep net investment income under pressure. Also, benefit expense ratio is expected to increase owing on margin expansion.
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 a Earnings ESP of -2.01%. This is because the Most Accurate estimate stands at $2.44, while the Zacks Consensus Estimate is pegged at $2.49. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Anthem carries a Zacks Rank #4 (Sell).
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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:
WellCare Health Plans Inc., which is expected to report third-quarter earnings results on Nov 1, has an Earnings ESP of +3.6% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Humana Inc.(HUM - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #2 (Buy). The company is expected to report third-quarter earnings results on Nov 4.
Ariad Pharmaceuticals Inc.has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is slated to report third-quarter earnings results on Nov 1.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>