UnitedHealth, Elevance earnings to test 28% health stock rally

UnitedHealth Group and Elevance Health report quarterly earnings on July 15 and 16, testing whether the health insurance sector's 28% year-to-date rally can withstand a second-quarter cost check.

UnitedHealth Group and Elevance Health report quarterly results this week, with the two largest US health insurers by market capitalization facing investor scrutiny on medical cost trends after a first quarter that rewarded disciplined pricing.

Elevance Health kicks off the week on July 15, followed by UnitedHealth on July 16 and CVS Health on Aug. 5. The trio collectively covers more than 100 million members across commercial insurance, Medicare Advantage and Medicaid.

"The first quarter showed that repricing is working, but the question is whether those margins hold into the back half of the year," said Sam Goldstein, healthcare analyst at Edgen. "The market is pricing in a beat for UnitedHealth, but Elevance has more to prove after its benefit ratio spiked in the fourth quarter."

UnitedHealth enters the week with momentum. The Minnetonka, Minnesota-based insurer delivered first-quarter adjusted EPS of $7.23, beating the $6.60 consensus by 9.55 percent, while its medical care ratio improved 90 basis points to 83.9 percent. Operating cash flow jumped 63.34 percent to $8.9 billion. Management raised full-year 2026 adjusted EPS guidance to above $18.25 from a prior above-$17.75 target. Prediction market Polymarket assigns a 71 percent probability of a second-quarter beat.

Elevance Health faces a higher bar. The Indianapolis-based insurer is expected to report EPS of $6.18, down 30.1 percent from a year earlier, on revenue of $48.45 billion, a 2 percent decline. Its fourth-quarter 2025 benefit expense ratio hit 93.5 percent, meaning the company paid out 93.5 cents of every premium dollar on medical claims, swinging its Health Benefits segment to a loss. The Zacks Earnings ESP, which measures the gap between the most recent analyst estimate and the consensus, stands at negative 0.42 percent for Elevance, suggesting analysts have turned slightly more bearish ahead of the print.

What the results mean for the sector

The earnings come at a pivotal moment for managed care stocks. The S&P 500 Managed Health Care index has gained roughly 28 percent year to date, outpacing the broader S&P 500's 10 percent advance, as investors bet that 2025's cost pressures were a one-time event driven by elevated outpatient utilization and Medicare Advantage rate resets.

Humana's experience shows the risk of getting it wrong. The Louisville-based insurer guided full-year 2026 adjusted EPS to at least $9.00, down from $17.14 in fiscal 2025 — a 47 percent decline driven by Star Ratings damage that reduced Medicare Advantage quality bonus payments. UnitedHealth, by contrast, carries no such Star Ratings overhang and operates with the scale advantage of a $388.9 billion market cap.

For UnitedHealth, the key metric is the medical care ratio. At 83.9 percent in the first quarter, it sits well below Elevance's fourth-quarter 93.5 percent and Humana's elevated levels. The company plans roughly $8.0 billion in dividends and $2.5 billion in buybacks in 2026, with a $2 billion buyback tranche completed by the end of the second quarter. The stock's 2.15 percent dividend yield on an $8.84 annual payout offers income support.

For Elevance, the focus will be on whether the benefit expense ratio has improved from the fourth-quarter peak and whether management can stabilize the Health Benefits segment. The company has beaten consensus EPS estimates in three of the past four quarters, including a 17.79 percent surprise in the most recent reported period.

The results will set the tone for the sector heading into the second half of 2026. A clean print from both insurers could extend the rally; a miss — particularly on medical cost trends — could trigger a sector-wide reassessment of margin expectations.

This article is for informational purposes only and does not constitute investment advice.