ELV Stock Forecast & Price Target

Elevance Health's significant position as the largest provider of Blue Cross Blue Shield branded coverage in the U.S. and its expansion into government-sponsored programs highlight a robust growth trajectory, particularly through value-based care initiatives targeting 80% of consolidated medical spend by 2027. The company's integration with Carelon is expected to enhance both top-line and bottom-line performance, with an emphasis on shifting risk arrangements, aiming to have 40% of medical spend in downside risk by that same year. Additionally, the positive outlook is supported by an increase in ACA utilization and favorable trends in Medicare Advantage costs, which may lead to adjusted earnings per share exceeding current estimates in the near term.

Elevance Health is facing a challenging outlook due to anticipated fiscal year 2025 earnings per share (EPS) being approximately 10% lower than previous estimates, driven by slower Medicaid rate updates and increased benefit costs associated with Part D changes. Additionally, Medicaid utilization is decreasing, albeit at a pace that is slower than management had previously projected, contributing to uncertainty in revenue forecasts. Furthermore, the company's target valuation multiple is declining, signifying concerns over near-term EPS growth and overall financial performance in the upcoming year.