Elevance Health Inc

2026 guidance raised; 2027 growth confidence increased (core “good news”) - Q3 2026 adjusted diluted EPS: $6.99, above outlook; driven by ~$0.50/share operating outperformance plus net non-operating benefit of $1.85/share (mostly investment valuation adjustments; partly offset by some state tax items). - Revised 2026 guidance: at least $29 adjusted diluted EPS (raises expectations; includes a stronger ACA outlook partially offset by a non-recurring discrete tax item expected in Q4). - Raising the 2026 earnings baseline: now ≥ $26.75 (up +$0.75), improving confidence in durability into 2027. - 2027 forecast: management remains confident in ≥12% adjusted diluted EPS growth from the higher 2026 baseline (i.e., growth supported by margin improvement, Carelon adoption, and operating efficiency).

Strategic execution across major segments (Medicaid, Medicare Advantage, Individual ACA, Commercial) - Medicaid: Q3 ahead of outlook, primarily from recent rate actions; management says Medicaid cost trend remains elevated but stable. They now track slightly ahead of prior full-year margin guidance and expect Medicaid margins to improve in 2027. - Medicaid outlook framing: management reiterates 2026 as the “trough” for Medicaid margins and expects recovery as rates become better aligned with cost trends plus continuing targeted medical cost actions. - Medicare Advantage: product/geographic repositioning plus improved medical cost performance supports full-year operating margin of at least 2%; also repositioning for 2027 emphasizes HMO plans and dual-eligible members. - Stars: enterprise avg ~4 stars achieved again; about half of members in 4-star+ plans. Management treats Stars performance as a multi-year priority (member experience + clinical quality + provider engagement).

Carelon expansion is a key earnings engine (opportunity + measurable outcomes) - Carelon performance: described as strong; CarelonRx operating gain up to 10.8% and operating margin 5.3% for the quarter. - Clinical + pharmacy integration value: management claims integrated medical+pharmacy plans save up to ~$100 PMPM for clients and deliver ~30%+ fewer ER visits in integrated plans. - Enterprise medical cost savings: Elevate platform identified >$300 million in anticipated savings in the year-to-date period. - Oncology solution example: risk-based oncology engagement program reduced avoidable inpatient admissions by 15% in the commercial market. - Strategy: broaden adoption internally (affiliated health plans) first, then scale to external clients via RFP wins/retention.