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With a market cap of $90.6 billion, Elevance Health, Inc. (ELV) is a leading health benefits company, providing comprehensive health plans, pharmacy services, and healthcare solutions across the United States. Operating under the Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon brands, it supports individuals and communities in leading healthier lives.
Shares of the health insurer have underperformed the broader market over the past 52 weeks. ELV has declined 26.3% over this time frame, while the broader S&P 500 Index ($SPX) has gained nearly 23%. Moreover, ELV stock has risen 1.8% on a YTD basis, compared to SPX's 4% YTD gain.
Looking closer, the Indianapolis, Indiana-based company has lagged behind the Health Care Select Sector SPDR Fund's (XLV) marginal rise over the past 52 weeks and a 5.9% YTD gain.
Despite reporting better-than-expected Q4 2024 adjusted EPS of $3.84 and operating revenues of $45 billion on Jan. 23, shares of ELV fell marginally the next day. Adjusted EPS declined 31.7% year-over-year, while the Health Benefits segment’s operating gain plunged 75%, with its operating margin deteriorating by 150 basis points. Medical membership dropped 2% year-over-year to 45.7 million, missing the consensus estimate, primarily due to Medicaid attrition. Additionally, rising total expenses, a decline in net investment income, and management projected lower margins for the Health Benefits and Carelon Services segments in 2025.
For the current fiscal year, ending in December 2025, analysts expect ELV’s EPS to grow 2.8% year-over-year to $33.96. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 20 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 14 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is slightly less bullish than three months ago, with 15 “Strong Buy“ ratings on the stock.
On Feb. 19, Cantor Fitzgerald analyst Sarah James reaffirmed an “Overweight“ rating on Elevance Health with a $485 price target, citing its undervaluation and strong financial position.
As of writing, ELV is trading below the mean price target of $485.13. The Street-high price target of $625 implies a potential upside of 62.5% from the current price levels.
