It is early within the Q2 2022 earnings season, and as ordinary, UnitedHealth Group (NYSE:UNH) would be the first well being insurer to report earlier than the opening bell July 15.
UnitedHealth’s (UNH) outcomes are intently checked out by traders as they’re seen as a bellwether for the remainder of the trade. The corporate is the biggest well being insurer primarily based on membership.
UnitedHealth has a historical past of beating analyst estimates going again at the very least to Q2 2017.
For Q2 2022, analysts predict GAAP EPS of $4.99 and income of $79.68B.
As COVID-19 continues to have much less of a every day influence, one statistic in earnings releases to concentrate to is change within the medical loss ratio (“MLR”). This represents the share of premiums which are really spent on medical claims.
Through the peak of the pandemic, many physician visits and procedures had been postpone, permitting the MLR to fall for a lot of insurers. This helped the underside line.
There are already indicators MLRs are rising. In its Q1 outcomes, the MLR was 82%, up from 80.9% within the year-ago interval.
Regardless of the slight uptick, UnitedHealth (UNH) raised its fiscal 2022 EPS outlook.
The insurer’s monitor report is more likely to proceed on Friday. In June, Loop Capital initiated UnitedHealth (UNH) with a purchase score and a $575 worth goal (~11% upside primarily based on Friday’s shut) citing the insurer’s scale, management, and expertise permitting it to have aggressive benefits.
Though shares are solely up ~4% yr so far, the bullish sentiment for UnitedHealth isn’t common. Whereas saying it’s a nice firm, In search of Alpha contributor Jim Sloan simply wrote that its shares are at the moment overvalued.
The well being insurer with the very best YTD efficiency — up ~19% — is Cigna (NYSE:CI). Its Q2 outcomes come out on Aug. 4.
In June, Morgan Stanley upgraded shares to chubby from equal weight citing the potential launch of Humira (adalimumab) as a possible catalyst. Cigna (CI) owns pharmacy profit supervisor (PBM) Evernorth, previously often called Specific Scripts. The agency has a worth goal of $296 (6% upside).
Different well being insurers even have their very own PBMs, which have not too long ago come below scrutiny from federal regulators. In June, the Federal Commerce Fee mentioned it might launch a probe into the drug middlemen and prescription drug costs.
In an investor day presentation final month, Cigna (CI) projected a ten%-13% common annual EPS progress charge. The corporate mentioned progress would come from a number of areas together with industrial and U.S. authorities divisions, Evernorth, and focused M&A.
For Q2 2022, analysts predict GAAP EPS of $4.58 and income of $44.34B.
Elevance Well being (NYSE:ELV), which was often called Anthem till June, is finest often called the the operator of many Blue Cross Blue Protect plans. The corporate will report on July 20 earlier than the market open.
YTD, shares are up ~4%. In early June, the corporate reiterated its adjusted web earnings steerage for 2022 of greater than $28.40 per share. Consensus is $28.21.
Based mostly on a market-implied outlook, In search of Alpha contributor Geoff Consedine notes that Elevance (ELV) is barely bullish into 2023.
For Q2, analysts predict GAAP EPS of $7.31 and income of $38.08B.
Aetna, a part of CVS Well being (NYSE:CVS), has been performing properly over the previous few quarters. In Q1, the well being care section added $23.1B in income (out of $79.8B complete for CVS) and Aetna added 674K new members. The corporate will report Q2 earnings on Aug. 3.
CVS’ (CVS) Q2 outcomes could also be negatively influence by its drug retailer division. That is as a result of the waning influence of COVID has eased exams carried out and bought in shops, in addition to vaccines administered.
For Q2, analysts predict GAAP EPS of $1.88 and income of $76.35B.
Humana (HUM) is the one managed care supplier that has obtained a robust purchase evaluation from In search of Alpha’s Quant Score. It reviews earlier than the market open on July 27.
For years, the insurer has benefitted from its robust presence within the Medicare and Medicaid markets. The corporate has said it intends to develop it Medicare Benefit membership by 150K-200K members in 2022.
Humana has crushed analyst EPS estimates since at the very least Q2 2017. For Q2, analysts predict GAAP EPS of $7.55 and income of $23.45B.