Elevance Health Shares Face Pressure Amid Cautious 2026 Guidance

Anthem US0367521038

Despite posting a strong finish to its fiscal year, Elevance Health Inc. has issued a restrained forecast for 2026, sending its shares lower. The U.S. health insurer, formerly known as Anthem, is navigating significant headwinds from declining membership and structural shifts within government-sponsored Medicaid and Medicare Advantage programs.

The company’s fourth-quarter 2025 performance exceeded market expectations. It reported an adjusted earnings per share (EPS) of $3.33, surpassing the consensus estimate of $3.10. Operational revenue also saw a 10% year-over-year increase, reaching $49.3 billion.

However, management’s outlook for the current fiscal year disappointed investors. The company projected an adjusted EPS of at least $25.50 for 2026, a figure notably below the prior market expectation of approximately $26.90. This conservative stance has been reflected in the stock price, which declined roughly 8.3% over the past week to trade at €290.90.

Membership Declines Drive Cautious Stance

A primary concern for the company is the trend in its membership numbers. Elevance Health ended 2025 with approximately 45.2 million members, representing a decline of about half a million from the previous year. This reduction is largely attributed to the ongoing nationwide process of redetermining Medicaid eligibility in the United States.

Management anticipates this pressure will continue, forecasting a further double-digit percentage drop in risk-based membership for 2026. Consequently, total operational revenue is expected to decrease in the low single-digit percentage range. In response, the company is targeting an improved cost structure, aiming to lower its full-year 2026 Medical Loss Ratio (MLR) to about 90.2%. This key metric, which measures the proportion of premium revenue spent on medical claims, stood at a high 93.5% in Q4 2025.

Capital Return Strategy Remains a Priority

Amid these operational adjustments, Elevance Health continues to emphasize returning capital to shareholders. The board has declared a quarterly dividend of $1.72 per share for Q1 2026. Furthermore, the company plans to allocate roughly $2.3 billion toward share repurchases this year. This follows a total of $4.1 billion returned to investors via dividends and buybacks throughout the entirety of 2025.

Company leadership states that the current operational repositioning within Medicaid and Medicare Advantage is designed to cultivate a more favorable membership mix and enable more efficient pricing. For shareholders, the next key date is March 25, 2026, when the declared quarterly dividend will be paid to stockholders of record as of March 10.