ANTM - Embedded Expectations Analysis - 2021 08 30
Anthem, Inc. (ANTM:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 15.7x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may be concerned about Medicare Advantage contracts, their digital initiatives, and recent acquisitions.Specifically, management may lack confidence in their ability to continue winning new contracts in their Government business, sustain momentum from the North Carolina Medicaid launch, and generate a strong ROI from their Medicare Advantage contract with the City of New York. Additionally, they may be concerned about market receptivity to their focus on whole health, progress in conducting due diligence on Aduhelm, and the impact of contract variability on membership growth. Furthermore, management may lack confidence in their ability to meet increased investment income guidance, maintain solid growth in the midst of the pandemic, and continue accelerating digital and virtual care initiatives. Finally, they may be overstating their understanding of New York City member health needs, the potential of the MMM and MyNexus acquisitions, and opportunities MyNexus presents in expanding their Medicare Advantage capabilities.
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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