Analyst Note| Julie Utterback, CFA |
Elevance Health (formerly called Anthem) delivered a strong second quarter and raised its 2022 outlook mildly for the second time in as many quarters, although shares traded down about 6% on an uptick in medical utilization that constrained margins in the employer segment, which was in contrast to trends noted on July 15 by UnitedHealth. We are maintaining our $452 per-share fair value estimate and view Elevance shares as fairly valued. Our narrow moat rating appears intact, too, and is primarily based on its local scale leadership that helps it offer lower premiums than most health insurers. Elevance continues to lead the U.S. medical membership landscape with 47.1 million members at the end of June, higher than even UnitedHealth's 45.8 million U.S. members, despite the latter's broader national network.