Revenues for the 11 largest publicly traded U.S. managed care insurers are expected to be up year over year in the fourth quarter of 2022, according to an S&P Global Market Intelligence examination of sell-side analyst forecasts.
UnitedHealth Group Inc. will top the list at $82.53 billion in terms of revenue amount, followed by Cigna Corp. at $45.77 billion, Elevance Health Inc. at $39.60 billion, Centene Corp. at $35.40 billion and Humana Inc. at $22.45 billion.
However, for the third straight quarter, industry analysts expect to see sequential decline in revenues for some of the largest U.S. managed care companies. Six of the 11 companies in the analysis are projected to report lower revenues quarter over quarter, namely Elevance Health, Centene, Humana, Molina Healthcare, Inc., Clover Health Investments Corp. and Alignment Healthcare Inc.
Earnings season will kick off Jan. 13 with UnitedHealth's conference call. Among the topics to be discussed are costs related to treatment of COVID-19, flu and respiratory syncytial virus, known as RSV, said J.P. Morgan analyst Lisa Gill.
Stocks for carriers in the sector should continue to show strength in the coming quarter. Factors that could have a bearing on investor attitudes include President Joseph Biden's decision on running for reelection in 2024 and the Feb. 1 publication of the Center for Medicare and Medicaid Services' long-delayed Risk Adjustment Data Validation rule, which deals with validation of diagnosis codes for medical procedures, Gill said.
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The results for earnings per share are also expected to be slightly mixed, with nine of the 11 insurers projected to record year-over-year gains. Centene, Oscar Health Inc. and Alignment Healthcare Inc. could post lower EPS year over year in the fourth quarter of 2022.
However, all but one will see a sequential decrease in EPS, based on industry analysts' projections. Only Alignment Healthcare's EPS is expected to improve quarter over quarter.
