ELV Stock Forecast & Price Target

Elevance Health demonstrates a robust growth trajectory with approximately 10% year-over-year increase in OEP membership, supported by successful expansion into new markets and strong retention in core Blue states. Management anticipates a Medicare Advantage margin increase of over 150 basis points year-over-year by 2026, driven by strategic pricing and shifts in membership mix towards dual-eligible special needs plans (D-SNPs). The company's strong performance in ASO, Medicaid, and ACA segments, combined with its unique positioning as the largest Blue Cross Blue Shield provider and a growing pharmacy benefit management presence, underscores a favorable outlook for Elevance Health's long-term financial prospects.

Elevance Health's outlook is negatively impacted by a projected approximately 100 basis points deterioration in the Medicaid margin for the latter half of 2025, indicating potential profitability struggles ahead. The company anticipates a decline in commercial risk membership by high single digits due to strategic pricing actions that have led to attrition, particularly in sectors with low margins, along with a significant projected drop in Medicaid members of about 9% year-over-year. Furthermore, headwinds for 2026 include a reduction in estimated earnings per share, influenced by challenges such as lower Medicaid margins, declines in Carelon earnings, and overall pressures from medical cost control and regulatory changes.