Elevate Your Insights: Is Elevance Health on Track for Recovery?
Indianapolis, Indiana-based Elevance Health, Inc. (ELV) is a major player in the health benefits industry, providing health insurance and related services. Currently valued at $85.6 billion by market cap, Elevance offers various benefits including health, dental, vision, pharmacy, life insurance, and disability insurance, all aimed at addressing healthcare disparities. The company is set to reveal its fiscal fourth-quarter earnings for 2024 on Wednesday, Jan. 22.
Anticipated Earnings: A Step Back for the Health Giant
Before the earnings announcement, analysts predict that ELV will report a profit of $3.82 per share on a diluted basis, reflecting a 32% decrease from the previous year’s $5.62 per share. Over the last four quarters, the company exceeded consensus estimates three times but fell short on one occasion.
Year-End Projections and Future Growth
For the full fiscal year, analysts expect ELV’s earnings per share (EPS) to land at $32.96, slightly lower than $33.14 reported in fiscal 2023. Conversely, projections for fiscal 2025 show an anticipated rise of 4.9% in EPS to $34.58.
Stock Performance: A Tough Year in Perspective
In the past year, ELV shares have significantly lagged behind the S&P 500’s 23.3% gains, with a decline of 21.8%. The stock also underperformed relative to the Health Care Select Sector SPDR Fund (XLV), which saw only modest gains during the same period.
Challenges Facing the Company
The underperformance is partly attributed to a reduction in Medicaid membership due to eligibility redeterminations and changing policies. Rising medical costs, particularly tied to an increase in elective procedures, add further pressure. Additionally, the health insurance sector faces challenges as chronic diseases become more prevalent among an aging population, pushing medical expenses higher.
Recent Earnings Report: A Mixed Bag
On Oct. 17, ELV shares fell by over 10% following the release of its Q3 results. While the adjusted EPS of $8.37 fell short of Wall Street’s expectation of $9.70, the company did report revenue of $44.7 billion, surpassing forecasts of $43.3 billion. For the full year, ELV anticipates adjusted EPS to be around $33.
Analyst Ratings Reflect Optimism
Despite recent hurdles, analysts maintain a positive outlook for ELV stock. It holds a “Strong Buy” rating overall, with 15 out of 20 analysts recommending the same, one suggesting a “Moderate Buy,” and four providing a “Hold.” The average analyst price target stands at $504.28, signaling a potential upside of 36.7% from current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
