Elevance hits 52-week high after Q1 earnings

Shares of Elevance Health (NYSE:ELV) reached a 52-week high on Thursday after the managed care player reported better-than-expected Q1 2024 results and raised its full-year outlook to a level above consensus.

It is the latest health insurer to exceed Wall Street expectations with financials against an improving backdrop for medical expenses in managed care.

Early this week, market leader UnitedHealth (UNH) also topped expectations with its Q1 financials, as its medical care ratio, the portion of premiums spent on healthcare costs, improved from the preceding quarter.

Elevance (ELV) said its benefit expense ratio in Q1 improved 20 basis points to 85.6%, which stood ahead of 86.1% in the Bloomberg consensus.

The company said that the outperformance was mainly driven by premium rate adjustments implemented to cover medical cost trends. However, shares of its Medicaid peers, Centene (CNC) and Molina Healthcare (MOH), rose in reaction.

Meanwhile, ELV’s operating revenue grew ~1% YoY to $42.3B as its premium revenue exceeded expectations, adding $35.7B to the topline despite a ~1% YoY drop. However, its Medicaid membership fell ~22% YoY as state-level eligibility reviews resumed last year after a COVID-era pause.

“Given the solid start to the year, we have increased our outlook for full-year earnings,” CEO Gail Boudreaux remarked. ELV raised its full-year outlook for adjusted diluted EPS to above $37.20, compared to $37.15 in the consensus and above $37.10 in the prior forecast.