ELV Stock Forecast & Price Target

Elevance Health is experiencing significant growth, with a 10% year-over-year increase in OEP membership, bolstered by expansion into newer markets in 2025, despite some attrition in core Blue states. The company's management anticipates an increase in Medicare Advantage margins of at least 2% in 2026, driven by effective pricing strategies and an improved membership mix, particularly through D-SNPs. Additionally, Elevance's strong performance in Medicaid and Commercial ASO demonstrates favorable margins and high retention, further supporting the company's positive outlook and potential for margin expansion across various business lines.

Elevance Health is facing significant challenges that contribute to a negative outlook, including a forecasted breakeven Medicaid margin for 2025, marked by a projected 100 basis points deterioration in the latter half of the year. The company anticipates a decline of approximately 750,000 members in its Medicaid program due to tightening eligibility requirements, alongside a decrease in Commercial Risk membership driven by deliberate pricing actions that are causing customer attrition, particularly in low-margin public sector accounts. Additionally, projected headwinds for 2026 include a $2.50 year-over-year impact on Medicaid, a modest decline in Carelon earnings, and overall earnings pressures resulting from a decrease in investment income and changes in the PDP market.