Here are five things to know.
1. Barron’s said Anthem has the lowest price-to-earnings ratio in relation to its peers, including Minnetonka, Minn.-based UnitedHealth Group and Hartford, Conn.-based Aetna.
2. According to the report, Anthem’s shares trade at about $152 — about 13 times the payer’s projected 2017 earnings of $11.50 a share — whereas UnitedHealth Group trades for 17 times its estimated 2017 earnings.
3. If Anthem completes its proposed $54 billion acquisition of Bloomfield, Conn.-based Cigna, investors may view that positively because the company projects a $3-a-share in earnings benefits in 2018.
4. Barron’s said the Trump administration’s promise to repeal the ACA could benefit Anthem, as the payer continues to lose money on the exchanges created under the law. By reforming the public exchanges, Anthem could see an earnings benefit of as much as $1 per share, $0.50 from a repeal of a special health insurer tax, $2 to $3 from a lower corporate tax rate and $2 from the renegotiation or ending of its contract with Express Scripts.
5. According to the report, some analysts estimate Anthem could earn as much as $20 per share in 2020, nearly double the $11 per share in operating profits the payer forecasted for 2016. Barron’s said analysts expect fourth quarter earnings for the company to be roughly $1.75 per share, compared with the $1.14 per share during the same period last year. Anthem will report its quarter four earnings Feb. 1.
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11 payers in the headlines
