Elevance Health shares slide as profit forecast hike fails to impress investors
ELV•Analysts say the guidance increase was not enough
"The outperformance in the quarter of over a $1/share was not fully recognized in the $0.25 guidance increase," said Morningstar analyst Julie Utterback.
Elevance, which has greater exposure to commercial insurance and Medicaid plans for low-income Americans, has been withdrawing from underperforming Medicare Advantage markets for older adults.
While expectations had been running high into the print, the beat on medical costs were likely shy of investor hopes, said Evercore ISI analyst Elizabeth Anderson.
For the quarter, Elevance reported a medical loss ratio, the percentage of premiums spent on medical care, of 89.7%. Analysts had expected a ratio of 90.15%, according to data compiled by LSEG.
Elevance raises profit forecast after earnings beat
Elevance Health raised its annual profit forecast after beating second-quarter earnings estimates on Wednesday, but its shares tumbled nearly 9% before the bell, as the revision fell short of investors' lofty expectations.
The company kicked off the second-quarter earnings season for health insurers. Larger peer UnitedHealth reports its results on Thursday.
Elevance raised its 2026 profit forecast to be at least $27 per share, compared with at least $26.75 projected earlier. Analysts on average were expecting an annual profit of $26.86 per share, according to data compiled by LSEG.
