Advertisement
Canada markets closed

  • S&P/TSX

    21,969.24
    +83.86 (+0.38%)
     

  • S&P 500

    5,099.96
    +51.54 (+1.02%)
     

  • DOW

    38,239.66
    +153.86 (+0.40%)
     

  • CAD/USD

    0.7316
    -0.0007 (-0.09%)
     

  • CRUDE OIL

    83.66
    +0.09 (+0.11%)
     

  • Bitcoin CAD

    86,032.42
    -2,229.48 (-2.53%)
     

  • CMC Crypto 200

    1,305.55
    -90.99 (-6.51%)
     

  • GOLD FUTURES

    2,349.60
    +7.10 (+0.30%)
     

  • RUSSELL 2000

    2,002.00
    +20.88 (+1.05%)
     

  • 10-Yr Bond

    4.6690
    -0.0370 (-0.79%)
     

  • NASDAQ

    15,927.90
    +316.14 (+2.03%)
     

  • VOLATILITY

    15.03
    -0.34 (-2.21%)
     

  • FTSE

    8,139.83
    +60.97 (+0.75%)
     

  • NIKKEI 225

    37,934.76
    +306.28 (+0.81%)
     

  • CAD/EUR

    0.6838
    +0.0017 (+0.25%)
     

Will Anthem (ANTM) Be Able to Beat Q4 Earnings Estimates? - Analyst Blog

Zacks Equity Research
Updated

We expect health maintenance organization, Anthem, Inc. (ANTM) to beat expectations when it reports fourth-quarter 2014 earnings on Jan 28, 2015.

Why a Likely Positive Surprise?

Our proven model shows that Anthem is likely to beat earnings because it has the right combination of two key components.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.74%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank: Anthem carries a Zacks Rank #2 (Buy). Note that stocks with Zacks Ranks #1, 2 and 3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

The combination of Anthem’s Zacks Rank #2 and +1.74% ESP makes us confident of an earnings beat in the coming week.

What's Driving the Better-Than-Expected Earnings?

Anthem, earlier known as Wellpoint Inc., undertook a number of initiatives in the past quarter that should drive earnings. These include alliances with Critical Measures to offer new e-learning tool on global medicine, Boehringer Ingelheim Pharmaceuticals, Inc. to begin a research project to cater to the medical requirements among masses, research collaboration with Eli Lilly and Company (LLY) and HealthCore, Inc. to improve health outcomes, and American Lung Association to address childhood asthma.

We believe the above endeavors will help the company gain more members, thereby witnessing a top-line boost. Moreover, the announcement to acquire Simply Healthcare Holdings, Inc. is likely to enhance Anthem’s government business division.

The positive trend has been seen in the trailing four-quarter average surprise of 5.05%. This was possible because of increased memberships across the Commercial and Government segments of Anthem.

Other Stocks to Consider

Anthem is not the only stock looking up this earnings season. We also see a likely earnings beat coming from these two companies in the HMO sector:

ADVERTISEMENT

Centene Corp. (CNC) has Earnings ESP of +1.76% and a Zacks Rank #1 (Strong Buy).

Humana Inc. (HUM) has Earnings ESP of +0.86% and a Zacks Rank #2.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
ANTHEM INC (ANTM): Free Stock Analysis Report
 
HUMANA INC NEW (HUM): Free Stock Analysis Report
 
LILLY ELI & CO (LLY): Free Stock Analysis Report
 
CENTENE CORP (CNC): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research