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The Zacks Analyst Blog Highlights: Centene, Anthem, Humana, Molina Healthcare and Magellan Health
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For Immediate Release
Chicago, IL – April 14, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Centene Corp. (CNC - Free Report) , Anthem Inc. , Humana Inc. (HUM - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Magellan Health, Inc. .
Here are highlights from Monday’s Analyst Blog:
These Health Insurers Are Poised to Beat Q1 Earnings Estimates
As the COVID-19 pandemic continues to wreak havoc on different business sectors far and wide, the health insurance industry is too not left unscathed by its adverse impact.
Last month, Fitch Ratings revised its outlook for the health insurance segment from stable to negative, citing "expectations for an adverse effect on industry fundamentals related to COVID-19." The rating agency projects steep claims costs associated with the spread of the virus, which will dent profitability and debt-service metrics. The rating giant believes that the pandemic will drain earnings for health insurers in 2020. Also weakness in employment scenario will induce a loss in Commercial business.
However, the immediate effect of the coronavirus breakout will not be that severe in the first-quarter earnings since much of the business damages occurred in the second half of March.
Therefore, the industry participants are likely to see an increase in first-quarter revenues on higher premium across Commercial, Medicare Advantage and Medicaid insurance plans.
Significantly, the COVID-19 pandemic will provide some respite to insurers’ Medical Loss Ratio (MLR), which is the ratio of premium spent on claims.
Since the hospital’s elective procedures and surgeries are put on hold, this will positively impact the MLR of the health insurers in the form of lower claim outgo. However, the impact of this MLR will be moderate in the first quarter and more visible in the future quarters. A decline in MLR will aid insurers’ margins in the to-be reported quarter.
However, decreased interest rates will hurt the investment income in the to-be-reported quarter because of low investment yields.
However, for the first quarter of 2020, we do not expect a massive blow from the COVID-19 fallout but presume players to be conservative in their earnings guidance.
In the first quarter, the health insurance industry has declined 20.7%, compared with the Zacks S&P composite's decrease of 19.5%.
Selecting the Winners
This is the right time for you to pick some banking stocks that are well-poised to beat on earnings in their upcoming releases.
Choosing stocks with earnings beat potential might be difficult unless one knows the process of shortlisting. One way to do the job is by opting for stocks with the perfect combination of a top Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — and a positive Earnings ESP.
Earnings ESP is our proprietary methodology to identify stocks that have high chances of delivering a positive surprise in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this ideal combination, chances of beating estimates are as high as 70%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
7 Major Health Insurers
Here are seven major health insurance stocks that have the right mix of elements to pull off positive earnings surprises this reporting cycle:
Centene Corp. has an Earnings ESP of +5.38% and a Zacks Rank of 3 at present. The stock’s earnings surpassed estimates in three of the last four quarters, missing the same in one. The average positive surprise is 3.27%.
Anthem Inc. has an Earnings ESP of +4.93% and is Zacks #3 Ranked. The company’s earnings surpassed estimates in three of the preceding four quarters, lagging the mark in one, the average positive surprise being 0.92%.
Humana Inc. has a Zacks Rank of 2 and an Earnings ESP of +10.01%. Its earnings surpassed estimates in each of the previous four quarters. The positive surprise is 8.28%, on average.
Molina Healthcare, Inc. has an Earnings ESP of +8.00% and a Zacks Rank of 2, currently. Its earnings surpassed estimates in each of the last four reported, the average being 13.79%.
Magellan Health, Inc. is a #3 Ranked stock and has an Earnings ESP of +39.26%. The company’s earnings surpassed estimates in two of the previous four reported quarters, falling short of the consensus mark in the other two. The average beat is 0.59%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Centene, Anthem, Humana, Molina Healthcare and Magellan Health
For Immediate Release
Chicago, IL – April 14, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Centene Corp. (CNC - Free Report) , Anthem Inc. , Humana Inc. (HUM - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Magellan Health, Inc. .
Here are highlights from Monday’s Analyst Blog:
These Health Insurers Are Poised to Beat Q1 Earnings Estimates
As the COVID-19 pandemic continues to wreak havoc on different business sectors far and wide, the health insurance industry is too not left unscathed by its adverse impact.
Last month, Fitch Ratings revised its outlook for the health insurance segment from stable to negative, citing "expectations for an adverse effect on industry fundamentals related to COVID-19." The rating agency projects steep claims costs associated with the spread of the virus, which will dent profitability and debt-service metrics. The rating giant believes that the pandemic will drain earnings for health insurers in 2020. Also weakness in employment scenario will induce a loss in Commercial business.
However, the immediate effect of the coronavirus breakout will not be that severe in the first-quarter earnings since much of the business damages occurred in the second half of March.
Therefore, the industry participants are likely to see an increase in first-quarter revenues on higher premium across Commercial, Medicare Advantage and Medicaid insurance plans.
Significantly, the COVID-19 pandemic will provide some respite to insurers’ Medical Loss Ratio (MLR), which is the ratio of premium spent on claims.
Since the hospital’s elective procedures and surgeries are put on hold, this will positively impact the MLR of the health insurers in the form of lower claim outgo. However, the impact of this MLR will be moderate in the first quarter and more visible in the future quarters. A decline in MLR will aid insurers’ margins in the to-be reported quarter.
However, decreased interest rates will hurt the investment income in the to-be-reported quarter because of low investment yields.
However, for the first quarter of 2020, we do not expect a massive blow from the COVID-19 fallout but presume players to be conservative in their earnings guidance.
In the first quarter, the health insurance industry has declined 20.7%, compared with the Zacks S&P composite's decrease of 19.5%.
Selecting the Winners
This is the right time for you to pick some banking stocks that are well-poised to beat on earnings in their upcoming releases.
Choosing stocks with earnings beat potential might be difficult unless one knows the process of shortlisting. One way to do the job is by opting for stocks with the perfect combination of a top Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — and a positive Earnings ESP.
Earnings ESP is our proprietary methodology to identify stocks that have high chances of delivering a positive surprise in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this ideal combination, chances of beating estimates are as high as 70%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
7 Major Health Insurers
Here are seven major health insurance stocks that have the right mix of elements to pull off positive earnings surprises this reporting cycle:
Centene Corp. has an Earnings ESP of +5.38% and a Zacks Rank of 3 at present. The stock’s earnings surpassed estimates in three of the last four quarters, missing the same in one. The average positive surprise is 3.27%.
Anthem Inc. has an Earnings ESP of +4.93% and is Zacks #3 Ranked. The company’s earnings surpassed estimates in three of the preceding four quarters, lagging the mark in one, the average positive surprise being 0.92%.
Humana Inc. has a Zacks Rank of 2 and an Earnings ESP of +10.01%. Its earnings surpassed estimates in each of the previous four quarters. The positive surprise is 8.28%, on average.
Molina Healthcare, Inc. has an Earnings ESP of +8.00% and a Zacks Rank of 2, currently. Its earnings surpassed estimates in each of the last four reported, the average being 13.79%.
Magellan Health, Inc. is a #3 Ranked stock and has an Earnings ESP of +39.26%. The company’s earnings surpassed estimates in two of the previous four reported quarters, falling short of the consensus mark in the other two. The average beat is 0.59%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.