ANTM - Embedded Expectations Analysis - 2020 11 16
Anthem, Inc. (ANTM:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 14.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about Ingenio cost savings, healthcare utilization trends, and commercial enrollment declineSpecifically, management may lack confidence in their ability to sustain their 2019 Medicare Advantage growth, add new Medicare customers, and offset commercial enrollment declines. Furthermore, they may be exaggerating business resilience, their ability to deliver personalized care, and Ingenio's revenue potential. Moreover, management may lack confidence in their ability to sustain their cost savings run rate with Ingenio, widen the use of their PBM services, and provide ASO customers with more value. Also, they may have concerns about healthcare utilization trends and their impact on their medical loss ratio and EPS
Anthem is an insurance holding company. Through its subsidiaries, the company is a health benefits company, serving medical members through its affiliated health plans. The company has three segments: Commercial & Specialty Business, which provides fully-insured health products, managed care services to self-funded customers, and other insurance products and services; Government Business, which includes Medicare and Medicaid businesses, its subsidiary, National Government Services, and services provided to the federal government in connection with its Federal Health Products and Services business; and Other, which includes pharmacy benefits management business and integrated health services business.
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