From The Motley Fool · Motley Fool Transcribing · · 2m
Elevance Q3 2026 Earnings Beat
Elevance Health reports $50.4B revenue and $6.99 EPS beat with 12% growth outlook for 2027.
In brief
Elevance Health reports $50.4B revenue and $6.99 EPS beat with 12% growth outlook for 2027. Elevance Health raised 2026 earnings guidance to at least $29.00 per share and 2027 EPS growth to at least 12% based on Medicaid rate improvements and Carelon solutions. Originally reported by The Motley Fool.
Q3 Results
Elevance Health reported operating revenue of $50.4 billion, a 0.7% increase driven by higher premium yields and CarelonRx product revenue.
EPS Beat
Adjusted diluted EPS reached $6.99, exceeding the company outlook due to $0.50 per share in operating outperformance and favorable benefit expense.
2026 Guidance
Adjusted EPS guidance raised to at least $29.00 for the full year, representing an increase from the previous forecast based on operating momentum and non-operating benefits.
Medicaid Margin
Benefit expense ratio improved to 90.6%, representing a 70 basis point improvement due to performance in Medicare Advantage and individual ACA business.
Membership Trends
Total medical membership decreased to 44.9 million, a decline of 487,000 members as commercial fee-based growth was offset by Medicaid attrition.
Carelon Performance
Carelon operating gain increased 17% year over year to $0.9 billion driven by risk-based solutions and specialty pharmacy performance.
2027 Outlook
Elevance raised 2027 earnings baseline to at least $26.75, representing a $0.75 increase based on improved results and visibility entering 2027.
Medicaid Strategy
CFO Kaye stated, 'We continue to view 2026 as the trough for our Medicaid margin and expect improvement in 2027'.
“We continue to view 2026 as the trough for our Medicaid margin and expect improvement in 2027”
Carelon Solutions
Carelon's risk-based oncology solution reduced avoidable inpatient admissions by 15% in the commercial market.
Cost Savings
Elevate medical cost management platform identified more than $300 million in anticipated savings during the current year.
Medicare Advantage
Approximately 50% of Medicare Advantage members will be enrolled in plans rated four stars or higher for the 2027 period.
Commercial Growth
Commercial fee-based membership grew 1.9% to 21.0 million, reflecting strong demand for Anthem Balance funded product.
Share Repurchases
Share repurchases totaled 0.8 million shares for $330 million at a weighted average price of $398.75 per share.
Carelon Expansion
Carelon Services operating gain increased 33.3% to $292 million reflecting expansion of risk-based clinical solutions.
2027 Earnings
Elevance expects at least 12% adjusted diluted earnings per share growth in 2027 from the 2026 earnings baseline.
Leadership Change
Jeff Park appointed as President of Carelon to lead scaling of health services and pharmacy businesses.
In short
Elevance Health raised 2026 earnings guidance to at least $29.00 per share and 2027 EPS growth to at least 12% based on Medicaid rate improvements and Carelon solutions.
