Why Elevance Health Shares Are Surging Premarket On Wednesday?

Elevance Health, Inc. ELV shares are trading higher premarket on Wednesday. At the investors’ meeting this week, the company intends to reaffirm the full-year 2025 adjusted EPS of $34.15 to $34.85 (vs. consensus of $34.19).

Also, Elevance plans to reiterate GAAP EPS of $28.30 to $29.00, which includes approximately $5.85 per share in net unfavorable items.

Additionally, management expects to reiterate guidance for a full-year 2025 benefit expense ratio of 89.1%, plus or minus 50 basis points, and confirm that approximately 60% of the adjusted EPS is projected to be realized in the first half of the year.

In April, the company reported first-quarter 2025 revenues of $48.77 billion, up 15% year over year, higher than the consensus of $46.29 billion, and adjusted EPS of $11.97, beating the consensus of $11.38.

The benefit expense ratio in the quarter was 86.4%, an increase of 80 basis points year over year, reflecting a higher Medicaid medical cost trend, partially offset by out-of-period premium taxes. Reuters noted that the analysts' average estimate was 86.8%.

Last week, the company’s stock tanked after the Centers for Medicare & Medicaid Services said it would audit all eligible Medicare Advantage contracts for each payment year in newly initiated audits and invest additional resources to expedite the completion of audits in its backlog. 

Investors can gain exposure to the stock via iShares U.S. Health Care Providers ETF IHF and The Advisors Inner Circle Fund Cambiar Aggressive Value ETF CAMX.

Price Action: ELV shares are up 5.9% at $370 premarket at the last check on Wednesday.

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