Elevance Health Inc. raised its full-year profit guidance following a better-than-expected third quarter, signaling 2026 earnings will top Wall Street estimates. The healthcare giant boosted its 2026 earnings outlook by $2 a share, with adjusted earnings next year increasing by at least 12% from a new baseline of $26.75 a share. This growth pace would place Elevance's profit above the average analyst estimate in a Bloomberg survey.
The positive results add to industry optimism after rival United Health Group Inc. raised its profit outlook earlier this month. Insurers have struggled as rising medical costs ate into profits, prompting premium increases and benefit cuts. Elevance's shares rose 1.7% in early New York trading and have gained more than 25% this year, outpacing the S&P 500 Index.
Third-quarter adjusted profit benefited by $1.85 a share as the value of private companies Elevance owns stakes in increased. The majority of the increase was due to one company, which the CFO declined to name. The insurer spent less premium revenue on medical care than Wall Street anticipated.
Even as the broader ACA market shrinks, Elevance's individual ACA plan membership remained approximately flat at 1.3 million, surprising the CFO. More enrollees followed through by paying premiums than expected. Bronze plan enrollment shifted toward staying in the market rather than leaving.
To protect finances, insurers have been increasing prices and cutting benefits. Elevance's membership has decreased in recent years, dropping to 44.9 million. The upbeat guidance shows confidence despite challenges in the Medicaid program facing nearly $1 trillion in funding cuts.
The company is winding down Medicaid plans in Washington, D. C. and Louisiana. The company also announced Carelon's new president will be Jeff Park, formerly president of Waltz Health, effective December 1.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing