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Indianapolis, Indiana-based Elevance Health, Inc. (ELV) operates as a health benefits company providing health insurance and related services. Valued at $85.6 billion by market cap, the company provides health, dental, vision, and pharmacy benefits, as well as life insurance, and disability insurance benefits dedicated to address healthcare disparities. The healthcare giant is expected to announce its fiscal fourth-quarter earnings for 2024 on Wednesday, Jan. 22.
Ahead of the event, analysts expect ELV to report a profit of $3.82 per share on a diluted basis, down 32% from $5.62 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing the forecast on another occasion.
For the full year, analysts expect ELV to report EPS of $32.96, down marginally from $33.14 in fiscal 2023. However, its EPS is expected to rise 4.9% year over year to $34.58 in fiscal 2025.
ELV stock has considerably underperformed the S&P 500’s ($SPX) 23.3% gains over the past 52 weeks, with shares down 21.8% during this period. Similarly, it underperformed the Health Care Select Sector SPDR Fund’s (XLV) marginal gains over the same time frame.
ELV’s underperformance can be due to declining Medicaid membership due to eligibility redeterminations and policy changes, and increasing medical costs due to a rise in elective procedures. Moreover, the health insurance industry is struggling due to growing prevalence of chronic diseases among the aging population, contributing to higher medical expenses.
On Oct. 17, ELV shares closed down more than 10% after reporting its Q3 results. Its adjusted EPS of $8.37 missed Wall Street expectations of $9.70. The company’s revenue was $44.7 billion, beating Wall Street forecasts of $43.3 billion. ELV expects full-year adjusted EPS to be $33.
Analysts’ consensus opinion on ELV stock is bullish, with a “Strong Buy” rating overall. Out of 20 analysts covering the stock, 15 advise a “Strong Buy” rating, one suggests a “Moderate Buy,” and four give a “Hold.” ELV’s average analyst price target is $504.28, indicating a potential upside of 36.7% from the current levels.
