Report: July 15, 2026, at 6:00 a.m. ET
Conference call: 8:30 a.m. ET (elevancehealth.com)
Elevance enters the report with considerably more optimism priced into the shares than it had three months ago. At the July 14 close of $426.83, ELV was up roughly 20% year to date and 30% since April 21, the day before its first-quarter report.
The rally reflects three expectations:
Consequently, a routine EPS beat may not be enough. Investors will care more about the benefit expense ratio, Medicaid and ACA cost trends, the quality of guidance, and the CMS risk-adjustment matter.
| Q2 metric | Consensus/benchmark | Q2 2025 |
|---|---|---|
| Adjusted EPS | $6.18–$6.20 | $8.84 |
| Operating revenue | $48.5B–$48.6B | $49.4B |
| Benefit expense ratio | 89.4% | 88.9% |
| Total medical membership | 44.82M | 45.62M |
| Medicare Advantage membership | 1.87M | 2.26M |
| Medicaid membership | 8.23M | 8.73M |
| Individual ACA membership | 1.21M | 1.35M |
| Commercial fee-based membership | 27.68M | 27.15M |
Consensus implies adjusted EPS falling about 30% and revenue declining approximately 2%. Premium revenue is expected to decline 3.3%, partially offset by roughly 5% growth in product revenue and 6% growth in service fees. (zacks.com)
Importantly, management said Q2 adjusted EPS should equal approximately 23% of full-year guidance. Applied to the current $26.75 floor, that implies about $6.15, almost exactly matching consensus. Thus, the reported EPS hurdle itself is not especially demanding.
The most important number will be the benefit expense ratio, not revenue.
Consensus calls for 89.4%, 50 basis points worse than Q2 2025. The year-over-year deterioration is not necessarily alarming by itself: Elevance is carrying fewer, but potentially more acute, Medicaid and ACA members, while Q2 also has a less favorable seasonal profile than Q1.
What matters is where the ratio lands relative to 89.4% and management’s explanation:
Q1’s 86.8% ratio was 70 basis points better than consensus, but part of the earnings outperformance came from a milder flu season and ACA timing. Management said the heavier bronze-plan mix defers some ACA medical costs into later quarters, so investors should not mechanically extrapolate Q1’s result. (elevancehealth.com)
Elevance continues to describe 2026 as the trough year for Medicaid profitability. Its full-year framework assumes:
The consensus membership estimate of 8.23 million represents a 5.8% year-over-year decline and would be down from 8.46 million in Q1. (zacks.com)
Investors should focus on three questions:
A slight improvement to the negative 1.75% margin outlook would be one of the clearest positive catalysts. Conversely, evidence that rates continue to lag while acuity worsens would undermine both the 2026 guidance and the promised 2027 earnings recovery.
Elevance ended Q1 with 1.42 million individual members and expected to finish Q2 at approximately 1.2 million, ahead of its original expectations. Consensus now sits at 1.21 million.
Management has highlighted a significant shift toward bronze plans. That has two effects:
This means the ACA business may have contributed unusually favorable seasonality in Q1 without necessarily improving full-year economics. Q2 should provide better evidence about:
Preliminary 2027 industry filings point to another year of substantial premium increases, reinforcing the need for management to discuss both pricing adequacy and affordability pressures. (zacks.com)
Operationally, Medicare has been one of the brighter areas. Elevance deliberately exited or repriced less attractive plans, producing an expected high-teens decline in Medicare Advantage membership while targeting an operating margin of at least 2% in 2026.
Consensus calls for 1.87 million MA members, down 17% year over year but only modestly below Q1’s 1.90 million. The right outcome is therefore not membership growth; it is evidence that the retained book is earning materially better margins.
The separate CMS risk-adjustment dispute remains a major disclosure item. Elevance recorded a $935 million accrual in Q1. CMS initially threatened enrollment sanctions over historical risk-adjustment data, but said on May 29 that it would not impose intermediate sanctions at that time after Elevance submitted initial corrected data and made a repayment. CMS continues to classify the matter as being under corrective-action progress. (elevancehealth.com)
Court records subsequently indicated that Elevance paid approximately $342 million to CMS on May 27. Investors need clarity on:
Elevance has also sued CMS over its 2026 Star Ratings, arguing that inconsistent treatment following a court ruling involving Clover Health could cost Elevance approximately $115 million in 2027 quality-bonus payments. Any update could affect confidence in the 2027 earnings bridge. (beckerspayer.com)
Carelon generated 7.9% revenue growth in Q1, but operating gain declined 3.8%. Lower affiliated health-plan membership, investment in risk-based services and the earnings cadence of newer programs offset strength in specialty pharmacy and behavioral health. (elevancehealth.com)
Consensus expects Carelon operating income to decline approximately 3.8% again in Q2. Investors should look for:
Elevance recently announced additional Health OS automation for clinical review and provider data exchange. Strategically, that supports lower administrative costs and faster utilization-management decisions, but investors will want quantified savings rather than another technology narrative. (elevancehealth.com)
Elevance raised full-year adjusted EPS guidance in April from at least $25.50 to at least $26.75. However, approximately $1 per share of the increase came from nonrecurring investment income. Management therefore defines the underlying 2026 baseline as at least $25.75, from which it expects at least 12% growth in 2027. (elevancehealth.com)
That framework implies minimum 2027 adjusted EPS of approximately:
$25.75 × 1.12 = $28.84
At $426.83, ELV trades at approximately:
The valuation is not extreme, but the recent rally means investors are already assigning meaningful credibility to the recovery.
A guidance raise would be most valuable if it comes from core medical-cost and operating performance. A raise driven by investment income, taxes or other below-the-line items would carry less weight. Even without a raise, a clean reaffirmation accompanied by better Medicaid visibility could be well received.
| Outcome | What it might look like |
|---|---|
| Bull case | EPS above roughly $6.30; benefit ratio below 89%; Medicaid trend stable or improving; core guidance raised; CMS matter largely resolved; 2027 growth target reiterated with greater detail. |
| Base case | EPS around $6.15–$6.25; benefit ratio near 89.4%; Medicaid and ACA track plan; $26.75 guidance reaffirmed; CMS remains manageable but unresolved. |
| Bear case | Benefit ratio approaches or exceeds 90%; Medicaid acuity or ACA costs worsen; guidance or 2027 confidence weakens; additional CMS exposure emerges; Carelon margins remain under pressure. |
The report is less about whether Elevance earns $6.18 or $6.25 and more about whether the company can validate a multi-year margin-recovery thesis.
The strongest report would combine:
After the stock’s sharp advance, guidance quality and forward medical-cost commentary are likely to determine the reaction more than the headline EPS beat or miss.