Elevance Health

Elevance Health’s first quarter results were solid and the company delivered an all-around beat with a growth of around 15% compared to last year. The company had 48.1 million medical members at the end of the first quarter. Due to organic growth in Medicaid and Medicare Advantage, dual-eligible special needs plans, and group members, risk-based membership increased by roughly 1 million members year over year. Elevance’s membership increased by 15% over the previous year and by 19% so far this year in its commercial business. This growth was primarily due to geographic expansion and strategic product positioning, which should allow for further expansion once coverage changes related to Medicaid redeterminations start later this year. In the quarter, Medical Claims Payable also included roughly $400 million more in provider pass-through Medicaid payments. In line with Elevance’s long-term objective compound annual growth rate of 12% to 15%, momentum in the company’s Health Benefits and Carelon businesses increases its confidence in delivering another year of growth in adjusted profits per share. We give Elevance Health a ‘Hold’ rating with a revised target price.