Elevance Health reported fourth-quarter operating revenue of $49.3 billion, up 10% year-over-year, but operating gain narrowed to $300 million from $700 million a year earlier. Benefit expense ratio climbed to 93.5%, an increase of 110 basis points driven by elevated medical cost trends in Affordable Care Act plans and heightened Medicare Part D seasonality under recent drug pricing legislation. Adjusted operating gain fell to $400 million, while operating margin contracted to 0.6% from 1.5%.

Management guided 2026 adjusted earnings per share below consensus, citing continued medical cost inflation in its Medicare Advantage and ACA portfolios. The company expects full-year operating revenue growth to moderate to the mid-single-digit range and adjusted operating margin to remain under pressure until cost trends normalize. This follows the administration’s recent Medicare Advantage payment proposal, which could limit premium yield expansion and further compress margins in the segment that contributed 11% revenue growth in 2025.

Elevance generated $4.3 billion in operating cash flow in 2025, representing 0.8 times GAAP net income, and held $2.6 billion in parent-level cash and investments as of December 31. During Q4, the company repurchased 1.4 million shares for $471 million at an average price of $335.64 and declared a quarterly dividend of $1.72 per share, totaling $377 million. Share repurchase authorization stands at $6.7 billion. Institutional investors have shown mixed positioning, with Barlow Wealth Partners trimming its stake by 88.8% in Q3 2025, while Norges Bank and Sanders Capital added new positions valued over $1 billion each.