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What to Expect from Anthem (ANTM) this Earnings Season?

Anthem Inc. ANTM will release second-quarter 2017 results on Jul 26, before the market opens.

Last quarter, the company pulled off a positive earnings surprise of 21.56%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Anthem is likely to witness an increase in its overall enrollment, primarily backed by substantial medical enrollment growth.

Solid revenue growth is expected in both of its Government Business and Commercial Business, backed by strong enrollment growth.

The Iowa Medicaid contract is likely to have boosted the company’s top line significantly.

Medicare Advantage product offerings might have supported Medicare enrollment growth, again boosting the company’s top-line.

However, Anthem expects to witness higher medical costs for individual ACA-compliant products, as was the case last quarter.

In addition, the company is also likely to have experienced higher benefit expense ratio from its Medicaid business due to higher claims.

Administrative costs might have risen during the second quarter, continuing the previous quarter’s trend.

Earnings Whispers

Our proven model does not conclusively show that Anthem is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Anthem has an Earnings ESP of -1.23%. This is because the Most Accurate estimate is $3.21, while the Zacks Consensus Estimate is pegged higher at $3.25. You can uncover the best stocks to buy or sell before they’re reported with our https://www.zacks.com/premium/esp-buy?adid=zp_article_espfil...">Earnings ESP Filter.

Zacks Rank:Anthem currently sports a Zacks Rank #1. Though a favorable Zacks Rank increases the predictive power of ESP, we need a positive Earnings ESP to be confident about an earnings beat.
 

Anthem, Inc. Price and EPS Surprise

 

Anthem, Inc. Price and EPS Surprise | Anthem, Inc. Quote

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

Stocks to Consider

Here are some companies from the medical sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

Align Technology, Inc. ALGN, which is set to report second-quarter earnings on Jul 27, has an Earnings ESP of +1.37% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pfizer, Inc.PFE has an Earnings ESP of +1.54% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 1.

Humana, Inc. HUM has an Earnings ESP of +1.3% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 2.

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Pfizer, Inc. (PFE): Free Stock Analysis Report
 
Humana Inc. (HUM): Free Stock Analysis Report
 
Anthem, Inc. (ANTM): Free Stock Analysis Report
 
Align Technology, Inc. (ALGN): Free Stock Analysis Report
 
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