Anthem Inc

Strong Q3 performance; raises and upgrades 2026 outlook - Q3 adjusted diluted EPS = $6.99, above outlook. - Results driven by ~$0.50/share operating outperformance (better medical cost experience and execution across major lines). - Net non-operating benefit = $1.85/share (valuation adjustments in investment income, partly offset by state tax items). - 2026 guidance raised to at least $29 adjusted diluted EPS; the earnings baseline raised to at least $26.75 (up $0.75 from prior baseline), reflecting stronger underlying performance—especially better ACA outlook.

2027 forecast: ~12% adjusted EPS growth expected (from the higher 2026 baseline) - Company reiterated confidence in at least 12% adjusted diluted EPS growth in 2027, starting from the ending 2026 baseline of $26.75. - Management attributes growth to: health benefits margin improvement, expanded adoption of Carelon value-based solutions, and greater operating efficiency. - Emphasis that this is not dependent on one single market/assumption, which is key to their durability narrative.

Medicaid: improving trajectory (rates help, but execution matters) - Q3 Medicaid performance ahead of outlook, primarily from recent rate actions (noting underlying cost trend remains elevated but broadly stable). - Management view: 2026 is the trough for Medicaid margins; expects improvement in 2027 as rates become better aligned and targeted medical cost actions gain traction. - Specific target: Medicaid operating margin target of ~2%–4% over time. - Work requirements / HR1-related uncertainty: states are still developing implementation details; management expects incremental acuity pressure and continues to plan for membership/acuity changes, while expecting states to incorporate more current cost trends into 2027 rates (timing/implementation details vary by state).