On July 15, Elevance Health fell 8.18% in regular trading, trading at $382.86/share, with turnover of $58.96 million. The stock came under heavy selling pressure after reporting Q2 results that beat consensus but revealed significant margin deterioration.

Elevance Health reported Q2 adjusted EPS of $7.45, beating the analyst consensus estimate of $6.21 by approximately 20%. Revenue came in at $49.83 billion, exceeding expectations of $48.69 billion. The company also raised its full-year adjusted EPS guidance to at least $27, above the prior $26.75 target and consensus of $26.87. However, Q2 adjusted EPS declined 15.72% year-over-year from $8.84, and operating margin contracted sharply from 4.9% to 3.5%, with adjusted operating margin falling from 5.0% to 3.6%.

Additionally, the CEO disclosed during the earnings call that the company expects to exit more state Medicaid markets over the next 12 to 18 months, reflecting challenges in the Medicaid operating environment. The broader managed healthcare sector declined in sympathy, with UnitedHealth down 2.39%, Centene down 3.71%, and Molina Healthcare down 4.89%.

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