It has been about a month since the last earnings report for Elevance Health (ELV). Shares have added about 6.8% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Elevance Health due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Elevance Health, Inc. before we dive into how investors and analysts have reacted as of late.
ELV Beats Q2 Earnings Estimates on Higher CarelonRx Product Revenues
Elevance Health reported second-quarter 2026 adjusted earnings per share (EPS) of $7.45, which surpassed the Zacks Consensus Estimate by 20.6%. However, the bottom line declined 15.7% year over year.
Operating revenues advanced 0.8% year over year to $49.8 billion. The top line beat the consensus mark by 2.9%.
The quarterly results were primarily driven by higher premium yields in the Health Benefits segment and increased CarelonRx product revenues. The upside was partly offset by a decline in overall medical membership and an elevated expense level.
ELV’s Q2 Operational Update
As of June 30, 2026, Medical membership of Elevance Health was around 44.9 million, which dipped 1.5% year over year. The decrease was due to the expected loss of some commercial fee-based customers and a decline in Individual ACA and Medicaid membership. The reported figure beat the Zacks Consensus Estimate of 44.8 million and our estimate of 44.5 million.
Premiums totaled $41.3 billion in the quarter under review, which remained flat year over year and surpassed our estimate of $39.3 billion. Product revenues grew 3.7% year over year to $6.3 billion, marginally missing the Zacks Consensus Estimate by 0.9% and our estimate by 0.5%.
Net investment income rose 44.9% year over year to $704 million. The Adjusted operating margin of 3.6% deteriorated 140 basis points (bps) year over year.
Total expenses escalated 2.2% year over year to $48.5 billion in the second quarter, higher than our estimate of $46.7 billion. The year-over-year increase was due to higher cost of products sold, operating expenses and interest expenses.
The operating expense ratio was 11.1%, which increased 100 bps year over year. The benefit expense ratio increased 80 bps year over year to 89.7%.
Q2 Segmental Results of ELV
Health Benefits
The unit recorded operating revenues of $42.7 billion in the second quarter, which rose 2.7% year over year and beat the Zacks Consensus Estimate of $41.2 billion as well as our estimate of $40.7 billion. The segment benefited from increased premium yields.
The unit recorded an operating gain of $0.9 billion, which fell 43.8% year over year. It also missed the consensus mark of $1 billion. The operating margin deteriorated 170 basis points year over year to 2.1%.
Carelon
The segment’s operating revenues rose 6.1% year over year to $19.2 billion in the quarter under review, beating the Zacks Consensus Estimate of $18.4 billion and our estimate of $18.3 billion. The year-over-year increase was driven by higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services.
The unit’s operating gain of $0.9 billion was up 1% year over year, reflecting better profitability in specialty pharmacy. The operating margin deteriorated 30 bps year over year to 4.9%.
Corporate & Other
Operating revenues amounted to $6 million. The unit incurred an operating loss of $81 million, wider than the prior-year quarter’s loss of $71 million.
ELV’s Financial Details (As of June 30, 2026)
Elevance Health exited the second quarter with cash and cash equivalents of $10.2 billion, which advanced 7.8% from the 2025-end level. Total assets of $126.4 billion increased 4.1% from the figure as of 2025-end.
Long-term debt, less the current portion, amounted to $30.7 billion and fell 0.4% from the figure as of Dec. 31, 2025. There were no short-term borrowings at the end of the second quarter, while the current portion of the long-term debt amounted to $375 million.
Total equity of $45 billion was up 2.3% from the 2025-end level.
Elevance Health generated net cash flow from operations of $6.2 billion at the end of the second quarter of 2026. The figure rose from the prior-year figure of $3.1 billion.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $0.7 million in the second quarter. It had a leftover capacity of around $5.3 billion under its share buyback authorization as of June 30, 2026.
Elevance Health paid a quarterly dividend of $1.72 per share, adding up to a cash distribution worth $373 million.
ELV’s Revised 2026 Outlook
The company now expects adjusted EPS to be at least $27.00, up from the previous guidance of at least $26.75.
The operating margin for the Health Benefits segment was earlier estimated to witness a decrease of 50-25 bps from the 2025 reported figure. Also, the operating margin for CarelonRx was expected to see a 25-0 bps decline, while the same for Carelon Services was estimated to witness an increase of 0-25 bps.
Management had earlier projected operating revenues to witness a low-single-digit decline in 2026 from the 2025 level. Premium revenues were estimated to witness a mid-single-digit decline from the 2025 level. Medical enrollment was forecasted to be between 43.2 million and 43.9 million in 2026.
Net investment income was expected to be $1.9 billion. Interest expenses were forecasted to be $1.5 billion in 2026, while operating cash flow guidance raised to at least $6.0 billion. Diluted shares are estimated to be 219-220 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Elevance Health has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Elevance Health has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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