Anthem underwhelms in 2021 forecast

Anthem and Wall INDIANAPOLIS —

Street are starting 2021 with different ideas for how the health insurer’s year will turn out.

The Blue Cross-Blue Shield insurer said Wednesday it expects adjusted annual earnings to be greater than $24.50 per share, counting hits it expects from the COVID-19 pandemic and a recently passed Congressional spending bill.

That floor falls short of the average analyst expectation for earnings of $25.37 per share, according to FactSet. The insurer’s stock slipped in Wednesday trading.

Anthem said its forecast for this year includes a hit of between 50 and 70 cents per share due partly to the Consolidated Appropriations Act, which passed late last year and includes a one-year hike in Medicare doctor rates. The company also factored in other COVID-19 related hits to its Medicare business.

Counting those items, the insurer is expecting EPS growth of 9% in the new year, Jefferies analyst David Windley said in a research note. Without them, growth climbs to 12%, which fits in the lower end of the company’s long-range goal.

Health insurers like Anthem benefited earlier last year from a pandemic-induced drop in claims as people stayed home and away from doctor’s offices or surgery centers. But insurers have warned that that care would be rescheduled, and they expect to absorb more costs from testing and treating COVID-19 patients.

Anthem earned $551 million in the final quarter of 2020, with adjusted results totaling $2.54 per share. The insurer beat Wall Street per-share expectations by a penny.