ELV Stock Forecast & Price Target

Elevance Health maintains a strong competitive position as one of the largest health insurers in the United States, currently serving 46 million medical members. The company is poised for future growth through its strategic integration of Carelon with Health Benefits, aiming for 80% of consolidated medical spending to be in value-based care arrangements by 2027, with a significant portion in downside risk arrangements. Additionally, favorable trends in Medicare Advantage costs and the potential for improved Medicaid rates contribute to a positive outlook for Elevance Health's financial performance, with expectations of higher adjusted earnings per share in the coming fiscal year.

Elevance Health faces a negative outlook primarily due to projected earnings per share (EPS) for fiscal year 2025 being approximately 10% lower than estimates, attributed to slower than anticipated updates to Medicaid rates and rising benefit costs associated with Part D changes. Additionally, while Medicaid utilization is decreasing, it is occurring at a slower rate than previous forecasts suggested, further impacting financial performance. This uncertainty surrounding EPS growth has led to a decline in the company’s target multiple, indicating increased apprehension about near-term financial stability.