Latest news with #Elevance
Business Insider
5 days ago
- Business
- Business Insider
Elevance Health CEO Boudreaux buys $2.44M of shares
Elevance Health (ELV) CEO Gail Boudreaux disclosed the purchase of 8,500 shares at an average price of $286.94 for total value of $2.44M. Boudreaux now owns 151,020 shares of Elevance. Shares of Elevance bounced off their lows but remain down 6% to $283.52 in afternoon trading. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Yahoo
6 days ago
- Business
- Yahoo
Elevance Health (ELV) Stock Trades Down, Here Is Why
What Happened? Shares of health insurance provider Elevance Health (NYSE:EVH) fell 11.5% in the afternoon session after the company reported its second-quarter results and cut its full-year profit guidance, citing rising medical costs. The health insurer announced second-quarter adjusted earnings of $8.84 per share, which missed Wall Street's expectation of $9.16 per share. While revenue of $49.42 billion beat forecasts, the company's net income declined to $1.74 billion from $2.30 billion in the same quarter last year. The key concern for investors was the significant reduction in the company's full-year 2025 profit outlook. Elevance now expects adjusted earnings per share of approximately $30.00, a substantial cut from its previous forecast of $34.15 to $34.85. Management attributed the downgrade to "elevated medical cost trends" in its Medicaid and Affordable Care Act (ACA) health plans. This was reflected in a higher benefit expense ratio—the percentage of premiums spent on medical care—which rose to 88.9%, indicating that costs are growing faster than premiums. The news also weighed on shares of other health insurers facing similar cost pressures. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Elevance Health? Access our full analysis report here, it's free. What Is The Market Telling Us Elevance Health's shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Elevance Health and indicate this news significantly impacted the market's perception of the business. The previous big move we wrote about was 15 days ago when the stock dropped 9.9% on the news that peer, Centene pulled its full-year financial guidance, triggering a sector-wide sell-off. Centene cited that market growth was "lower than expected" and the number of people making claims was much higher than forecast. This news sparked fears among investors that the entire health insurance sector could be facing similar headwinds of rising costs and challenging market conditions. The negative sentiment quickly spread, impacting peers like Molina, UnitedHealth Group, and Elevance Health. Elevance Health is down 16.8% since the beginning of the year, and at $304.33 per share, it is trading 45.9% below its 52-week high of $562.29 from September 2024. Investors who bought $1,000 worth of Elevance Health's shares 5 years ago would now be looking at an investment worth $1,143. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
Yahoo
6 days ago
- Business
- Yahoo
Medical Insurers and Pharma Firms' Stock Slipped Thursday. Here's Why.
Key Takeaways Health insurance firms were some of Thursday's worst-performing stocks in both the S&P 500 and Dow Jones Industrial Average. Elevance Health shares plunged after the insurer lowered its outlook because of what CEO Gail Boudreaux called an 'unprecedented cost trend." Investors appeared to lose confidence in other companies that sell health insurance, as well as pharmaceutical insurers and pharmaceutical companies' stock fell Thursday, weighed down by Elevance's downbeat outlook and other factors. Health care was the worst-performing sector in the S&P 500 Thursday, while the index—and nearly all the other sectors within it—was on track to post modest gains. UnitedHealth Group (UNH), which provides health insurance and other services, was the worst-performing stock in the Dow Jones Industrial Average. Elevance Health (ELV) shares plunged 12%, making it the worst-performing stock in the S&P 500. The medical insurer lowered its outlook for a second consecutive year because of an 'unprecedented cost trend affecting multiple lines of business,' CEO Gail Boudreaux said on a conference call, according to a transcript from AlphaSense. Investors responded by selling other medical insurers' shares, with shares of Molina Healthcare (MOH) recently falling about 5%, of Centene Corp. (CNC) dropping 5% and of Cigna Group (CI) dipping 2%. UnitedHealth was down about 1%. Centene pulled its full-year guidance in early July, while UnitedHealth pulled its outlook in May. Some investors also appeared to sour on pharmaceutical companies. Shares of Abbott Laboratories (ABT), which makes medicine and nutritional products like Ensure, were recently down nearly 8%. Abbott narrowed its outlook for the year, noting declining demand for COVID-19 tests. Shares of the pharmaceutical company Eli Lilly (LLY) were recently off by 3% Read the original article on Investopedia
Yahoo
6 days ago
- Business
- Yahoo
Elevance cuts 2025 guidance as profit falls from higher ACA, Medicaid costs
This story was originally published on Healthcare Dive. To receive daily news and insights, subscribe to our free daily Healthcare Dive newsletter. Dive Brief: Elevance cut its 2025 guidance on Thursday after posting mixed second quarter results as the insurer struggles with elevated costs in the Affordable Care Act exchanges and the safety-net Medicaid program. The turbulence looks set to continue into 2026, mostly as a result of the GOP's recently passed tax and policy megabill that includes steep cuts to Medicaid and an overhaul of ACA eligibility and enrollment processes, executives said. Overall, Elevance's profit fell 24% year over year in the second quarter to $1.7 billion. That's despite revenue of $49.4 billion being up 14% from the same quarter last year. The insurer's stock fell almost 11% in Thursday morning's trade following the results. Dive Insight: Medical utilization came back with a vengeance after the COVID-19 pandemic in 2023 before accelerating last year, driving higher costs in government programs. At the same time, health insurers are absorbing regulatory changes that make it harder to predict utilization patterns and comfortably achieve profits, such as Medicaid resuming member eligibility checks after a pandemic-era pause and stricter risk adjustment policies in Medicare Advantage. UnitedHealth and Centene both yanked their 2025 guidance after observing accelerating utilization this year, while Molina lowered its own outlook. Elevance is now the latest to cut guidance. The Indianapolis-based payer, which covers almost 46 million people, lowered its outlook for adjusted earnings per share to around $30 for the year, instead of at least $34.15. 'We know this adjustment is disappointing,' Elevance CEO Gail Boudreaux said on a call with investors Thursday morning. But it 'reflects the same pressures that others in the sector have now confirmed ... [and] is anchored, in our view, that the elevated trends we are now observing will persist,' she said. 'Given the uncertainty in the broader [managed care] group, we believe that following [Centene] and [Molina's] updates in recent weeks that the reduced guidance was broadly expected,' J.P. Morgan analyst Lisa Gill wrote in a note on the payer's earnings. Specifically, Elevance saw more former Medicaid beneficiaries shift into ACA plans in the quarter due to the resumed eligibility checks. At the same time, some ACA members were removed from the coverage due to an inability to pay their premiums. All told, those trends drove a market-wide increase in members' health needs, raising Elevance's ACA spending, according to CFO Mark Kaye. Utilization ran notably higher in behavioral health, specialty pharmacy and emergency room care — especially the latter. Elevance's ACA members are utilizing the ER at almost two times the level of its commercial members, Kaye said. Meanwhile, some providers are also billing more aggressively — including through the dispute resolution process set up by the No Surprises Act, a concern that led Elevance to sue two Georgia providers and their billing company in May. And in the roughly two dozen states where Elevance manages Medicaid plans, the insurer is continuing to see higher acuity amid the eligibility checks, as people retaining coverage tend to be sicker and require more medical spending, executives said. The concern is that in 2026, this could all get worse as a result of the 'One Big Beautiful Bill' that President Donald Trump signed into law on July 4. The massive reconciliation package includes $1 trillion in cuts to Medicaid, and implements nationwide work requirements mandating certain Medicaid beneficiaries report work, education or volunteering hours in order to qualify for the coverage. It also requires people receiving subsidies for ACA plans to more militantly justify their eligibility and removes windows for enrollment. The law also doesn't extend more generous subsidies for ACA coverage that are credited with spurring record enrollment. Some 12 million people are expected to lose insurance as a result of the law, and another 4 million because of the subsidy cutoff. That will create significant ripple effects for the health insurance industry, which is predicated on being able to properly forecast utilization. That calculus gets notably trickier when membership rolls drastically change. Elevance expects the ACA risk pools to further degrade next year, so is raising premiums as a result, executives said during the call. 'Ultimately we believe the ACA market will likely be smaller and higher acuity next year, especially if the enhanced subsidies expire,' Kaye said. But it's too early to say whether other policy changes, like increased ACA market integrity, will help or hurt insurers in the long-term, Boudreaux added. As for Medicaid, Boudreaux noted that work requirements will create near-term enrollment pressures but can be worked through in the long-term. States also continue to update their rates to account for heightened utilization, and hopefully payment will soon catch up, according to the CEO. 'We still think that both Medicaid and the ACA markets are both very positive markets. Yes there's been a period of dislocation in what's happened — but again, it's been unprecedented,' Boudreaux said. In a bright spot for Elevance, the payer said its MA trend is coming in as expected. Higher costs in the privatized Medicare plans have been a stressor for some of Elevance's peers. Still, Elevance is focusing on nudging members towards plans like HMOs that allow it more direct control over spending, and on expanding dual Medicare-Medicaid plans that typically come with high margins, said Felicia Norwood, who leads government health programs for Elevance. Overall, Elevance reported a medical loss ratio of 88.9% in the second quarter, around what analysts had expected though notably higher than the 86.3% lodged same time last year. MLR, a percentage representation of how much in premiums an insurer spent on medical claims, is an important marker of cost trends during a specific period. Elevance's health benefits division reported revenue of $41.6 billion, up 12% year over year as Elevance charged higher premiums to try and cover the higher cost trend. However, the business' $1.6 billion in income from operations was down 27% as medical expenses well outpaced the premium hikes. Elevance's health services business Carelon outperformed expectations, with operating income of $900 million, up 29% year over year. Performance was particularly strong in Carelon Services, the non-pharmacy benefits segment of the division. Elevance said its late 2024 acquisition of home health company CareBridge contributed to the business' margins in the quarter. Recommended Reading Elevance brushes off fears of spiking Medicare Advantage costs
Reuters
6 days ago
- Business
- Reuters
Elevance cuts forecast as US health insurers battle higher costs
July 17 (Reuters) - Elevance (ELV.N), opens new tab cut its annual profit forecast and missed Wall Street estimates for quarterly earnings on Thursday, the latest U.S. health insurer to warn about persistently high medical costs. Its shares slid 11% after the company - the first major health insurer to report second-quarter earnings - flagged higher-than-anticipated costs in its individual plans that conform to the Affordable Care Act, known as Obamacare, and its Medicaid plans for low-income people. In the last three months, peers UnitedHealth Group (UNH.N), opens new tab, Centene (CNC.N), opens new tab and Molina Healthcare (MOH.N), opens new tab have warned of elevated costs across government-backed insurance plans. Elevance said it was monitoring the likely changes from the Trump administration's plans to implement work requirements for Medicaid beneficiaries. One investor said the mismatch of healthcare and regulatory costs and government funding pressure and the prices the insurers charge for the services may continue. "Across all government-sponsored plans, the assumptions that insurers rely on to price their plans are all highly unpredictable, and, if anything, will get worse over the next year," said Daniel Barasa, a portfolio manager at Gabelli Funds, which owns shares of Elevance. Barasa pointed to issues in Medicare for people aged 65 and older or with disabilities, Medicaid and Obamacare plans. Shares of Elevance fell 11.3% to $305.60 in afternoon trading while UnitedHealth, Centene, Molina, CVS Health (CVS.N), opens new tab , and Cigna (CI.N), opens new tab were down between 1% and 2%. Elevance Chief Financial Officer Mark Kaye said Medicaid work requirements in the Trump Administration's One Big Beautiful Act could further shift its member mix toward a sicker patient profile. The company also said it plans to work with states to ensure Medicaid patients have continued access to health plans. "Although external conditions remain dynamic, we are prioritizing factors we can directly influence and which are within our control, including taking decisive action to stabilize trends and align pricing for long-term sustainability," Kaye said. The pace of the 2026 expiration of additional premium tax credits implemented during the COVID-19 pandemic for people purchasing Obamacare plans adds additional uncertainty to enrollment figures, the company said. Julie Utterback, an analyst at Morningstar, said she thought Elevance planned to price its 2026 plans higher to improve its profit margins rather grab customers with lower prices. She, however, said, "the challenges being seen right now on the utilization front in that business may add pressure for 2026 rates, as well." Elevance said it sees annual adjusted profit of about $30 per share, compared with $34.15 to $34.85 per share it previously expected. Wall Street analysts said the forecast cut was largely in the range that investors were expecting going into the quarter. Elevance forecast full-year medical loss ratio, a closely watched metric which tracks medical costs, to be about 90%, reflecting the ongoing industry-wide trend of higher costs on Medicaid and Obamacare plans. For the quarter, Elevance reported a medical loss ratio, the percentage of premiums spent on medical care, of 88.9% compared with analysts' estimates of 88.70%.
