Elevance Health (ELV) is trading lower after releasing first-quarter 2026 earnings on April 22, 2026, a report that beat Wall Street expectations on both profit and revenue but included a large, highly scrutinized regulatory-related charge. The company said Q1 operating revenue was $49.5 billion and adjusted diluted EPS was $12.58, aided by strong operating results and roughly $1 per share of non-recurring investment income. However, investors are zeroing in on the regulatory and cost-risk headlines embedded in the quarter rather than the headline beat.

Elevance recorded a $935 million accrual in the quarter representing its current best estimate of potential exposure related to a CMS notice involving Medicare Advantage risk-adjustment data reporting and possible sanctions. Earlier, the company said CMS granted a requested extension that moved the date sanctions could be imposed from March 31, 2026, to May 30, 2026—keeping the issue in play during the heart of the year’s operating and enrollment planning.

Elevance raised its full-year 2026 adjusted diluted EPS guidance to at least $26.75 and said its full-year diluted EPS guidance is at least $19.85, including its estimate of the CMS matter’s financial impact. Despite the upward revision, the stock’s decline suggests investors remain concerned about how much additional friction the CMS issue could create—alongside broader questions around medical cost trend (including elevated Medicaid trend referenced in quarterly metrics) and the sustainability of earnings quality given the non-recurring investment income benefit in the quarter.