Elevance Health Inc

Strong Q2 performance → guidance raised (and capitalizes on execution) - Q2 2026 adjusted diluted EPS: $7.45, ahead of outlook. - Guidance raised: 2026 adjusted diluted EPS to at least $27 (from prior guidance range). - 2027 outlook reiterated/strengthened: confident in ≥12% adjusted EPS growth in 2027 off the ending 2026 earnings baseline (not a one-line or one-quarter story).

Operating drivers: “trend management” improved + disciplined expense control; upside partially from MA/ACA - Favorable benefit expense cited as key driver, especially in Medicare Advantage and individual ACA. - Deliberate MA portfolio actions (plan design + mix shift toward D-SNP/HMO) are translating into stronger-than-expected results; management reiterated a path to ≥2% MA operating margin in 2026. - Individual ACA: favorability driven by seasonality from higher bronze plan mix and favorable final 2025 CMS risk adjustment results (but management remains cautious not to extrapolate early-year favorability).

Medicaid: still dynamic and prudent; improving back-half margin but no “material trend relief” assumed - 2026 Medicaid operating margin outlook held at ~-1.75% (prudently unchanged), with 2026 expected as the trough. - Back-half improvement expected: management expects second-half Medicaid margin profile to improve from Q2, supported by constructive July 1 rate activity and continued cost actions. - Trend remains elevated but actionable: persistent cost drivers include behavioral health (incl. ABA), specialty pharmacy, outpatient surgery, ED utilization. - Key “surprise/important nuance” from management: no new stepwise acuity reset; incremental pressure increasingly tied to utilization among members who remain, not a sudden worsening mix.