Anthem shares close higher on Wednesday, health insurer posts better-than-expected revenue in Q1, maintains full-year EPS forecast

Anthem Inc’s (ANTM) first-quarter revenue, reported on Wednesday, topped Wall Street estimates, supported by pharmacy product revenue related to the launch of IngenioRx and by higher premium revenue.

Anthem shares closed higher for the fifth time in the past ten trading sessions in New York on Wednesday. It has also been the sharpest single-session gain since April 22nd. The stock went up 4.62% ($12.39) to $280.61, after touching an intraday high at $282.35, or a price level not seen since March 11th ($289.16).

Shares of Anthem Inc have retreated 7.09% so far in 2020 compared with a 9.02% loss for the benchmark index, S&P 500 (SPX).

In 2019, Anthem Inc’s stock went up 15.00%, thus, it underperformed the S&P 500, which registered a 28.88% gain.

Anthem’s total revenue went up 20.06% year-on-year to $29.62 billion during the quarter ended on March 31st and exceeded the median analyst estimate of $28.6 billion.

Operating cash flow, which represented 1.7 times net income for the first quarter, was reported at $2.5 billion, or increasing by $885 million compared to the year-ago quarter.

The benefit expense ratio was reported at 84.2% during the first quarter, down from 84.4% a year earlier, mostly due to the return of the health insurance tax in 2020.

Meanwhile, net income attributable to shareholders shrank to $1.52 billion ($5.94 per share) during the quarter ended on March 31st, from $1.55 billion ($5.91 per share) in the same period a year ago.

Earnings per share, which exclude special items, were reported at $6.48 during the latest quarter, while matching a consensus of estimates.

The health insurer maintained its full-year earnings forecast at $22.30 per share, even as it warned of global uncertainty stemming from the coronavirus pandemic.

Analyst stock price forecast and recommendation

According to CNN Money, the 22 analysts, offering 12-month forecasts regarding Anthem Inc’s stock price, have a median target of $324.00, with a high estimate of $362.00 and a low estimate of $265.00. The median estimate represents a 15.46% upside compared to the closing price of $280.61 on April 29th.

The same media also reported that at least 17 out of 24 surveyed investment analysts had rated Anthem Inc’s stock as “Buy”, while 5 – as “Hold”.

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