Elevance Health Faces Setbacks Amid Market Growth
Company Overview and Market Performance
Headquartered in Indianapolis, Indiana, Elevance Health, Inc. (ELV) plays a vital role in the healthcare industry, offering diverse health solutions to millions across the country. The company’s market capitalization stands at $93.4 billion, showcasing its stature through innovative services that include medical, pharmacy, behavioral, clinical, and wellness offerings.
However, ELV’s stock performance has lagged behind the broader market over the past year. The shares have dropped 16% while the S&P 500 Index ($SPX) has surged nearly 32.1%. In 2024 to date, ELV has seen a decline of 14.8%, compared to a 26.2% gain for the SPX.
Comparison with Healthcare Index
When narrowing the view, ELV has also fallen short compared to the iShares U.S. Healthcare Providers ETF (IHF), which has risen 5.5% over the last year and 3.4% so far this year.
The struggles faced by Elevance Health stem from several factors, including declining Medicaid membership, increasing costs, and a challenged balance sheet burdened by debt.
Recent Developments Impacting Stock
On November 12, shares of Elevance Health fell over 2% after the CFO announced expectations of ongoing Medicaid pressures extending into 2025, along with potential misses on Medicare Advantage margins for the same year.
For the current fiscal year, which concludes in December, analysts predict ELV’s earnings per share (EPS) to slightly decline by 0.5% to $32.96 on a diluted basis. The company’s history of earnings surprises has been mixed; it has exceeded consensus estimates in three of the last four quarters but missed once.
Analyst Ratings and Price Targets
Among the 20 analysts who monitor ELV stock, the majority maintain a “Strong Buy” consensus. This consensus consists of 15 “Strong Buy” ratings, two “Moderate Buys,” and three “Holds.”
It’s important to note that this consensus has softened compared to three months ago, when 16 analysts had rated the stock as a “Strong Buy.”
On November 5, Ann Hynes from Mizuho Financial Group, Inc. (MFG) revised Elevance Health’s price target from $585 to $505 while keeping an “Outperform” rating. This change followed the company’s recent earnings report and model update.
Currently, the average price target of $520.05 suggests a 29.4% upside from ELV’s present price. The highest target on Wall Street stands at $625, indicating potential growth of 55.5%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
