Elevance Health (ELV) Up 12.6% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Elevance Health (ELV). Shares have added about 12.6% 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? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.ELV Beats Q1 Earnings Estimates on Rising Net Investment IncomeElevance Health reported first-quarter 2026 adjusted earnings per share (EPS) of $12.58, which surpassed the Zacks Consensus Estimate by 17.8%. The bottom line rose 5.1% year over year.Operating revenues advanced 1.5% year over year to $49.5 billion. The top line beat the consensus mark by 3.7%.The strong quarterly results benefited on the back of strong growth in premiums. Segment-wise, the Carelon division posted a robust revenue surge, aided by scaling risk-based services, while Health Benefits saw increased premium yields. However, the upside was partly offset by a decline in overall medical membership and an elevated expense level.ELV’s Q1 Operational UpdateMedical membership of Elevance Health was around 45.4 million as of March 31, 2026, which dipped 0.9% year over year. The decrease was due to a decline in Medicaid, Medicare Advantage and Commercial Risk-Based membership. The reported figure beat the Zacks Consensus Estimate of 44.1 million and our estimate of 44.2 million.Premiums totaled $41 billion in the quarter under review, which improved 0.3% year over year and surpassed our estimate of $39.6 billion. Product revenues grew 7.2% year over year to $6.2 billion. The metric beat the Zacks Consensus Estimate and our estimate of $6.1 billion.Net investment income rose 29.7% year over year to $765 million. The metric surpassed the consensus mark of $480.6 million and our estimate of $456.6 million. The Adjusted operating margin of 6.5% deteriorated 20 basis points (bps) year over year.Total expenses escalated 3.9% year over year to $47.9 billion in the first quarter, higher than our estimate of $45.5 billion. The year-over-year increase was due to higher benefit expenses, operating expenses and interest expenses.The operating expense ratio came in at 12.8%, which deteriorated 190 bps year over year. The benefit expense ratio deteriorated 40 bps year over year to 86.8%.Q1 Segmental Results of ELVHealth BenefitsThe unit recorded operating revenues of $42.5 billion in the first quarter, which rose 2.6% year over year and beat the Zacks Consensus Estimate of $40.9 billion as well as our estimate of $40.8 billion. The segment benefited from increased premium yields.The unit recorded an operating gain of $2.2 billion, which fell 2.7% year over year. However, it beat the consensus mark of $1.9 billion. The operating margin deteriorated 30 basis points year over year to 5.1%.CarelonThe segment’s operating revenues rose 7.9% year over year to $18 billion in the quarter under review, beating the Zacks Consensus Estimate of $17.5 billion and our estimate of $17.1 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 $1.1 billion fell 3.8% year over year. The operating margin deteriorated 70 bps year over year to 5.9%.Corporate & OtherOperating revenues came in at $4 million in the first quarter. The unit incurred an operating loss of $1.1 billion, wider than the prior-year quarter’s loss of $140 million.ELV’s Financial Details (As of March 31, 2026)Elevance Health exited the first quarter with cash and cash equivalents of $9.7 billion, which advanced 1.7% from the 2025-end level. Total assets of $125.8 billion increased 3.6% from the figure at 2025-end.Long-term debt, less the current portion, amounted to $30.8 billion and fell 0.1% from the figure as of Dec. 31, 2025. Short-term borrowings at the first-quarter end were $724 million, while the current portion of the long-term debt amounted to $350 million.Total equity of $44 billion inched up from the 2025-end level.Elevance Health generated net cash flow from operations of $4.3 billion in the first quarter of 2026, which rose from the prior-year comparable period’s figure of $1 billion.ELV: Capital Deployment UpdateElevance Health bought back shares worth $1.1 billion in the first quarter. It had a leftover capacity of around $5.6 billion under its share buyback authorization as of March 31, 2026.Elevance Health paid a quarterly dividend of $1.72 per share, adding up to a cash distribution worth $376 million.ELV’s Revised 2026 OutlookThe company now expects adjusted EPS to be at least $26.75, up from the previous guidance of at least $25.50.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 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 is still projected to be at least $5.5 billion. Diluted shares are estimated at 219-220 million.How Have Estimates Been Moving Since Then?It turns out, estimates review flatlined during the past month.VGM ScoresCurrently, Elevance Health has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.Outlook Elevance Health has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks