Elevance Health, Inc.
ELV
$373.11
+0.07%
Elevance Health, Inc. is a leading health insurer in the United States, providing medical benefits to 45 million members through employer, individual, and government-sponsored coverage plans. As the largest single licensee of Blue Cross Blue Shield branded coverage across 14 states, it holds a distinct competitive position, further strengthened by acquisitions like Amerigroup and MMM that expand its reach in government programs such as Medicaid and Medicare Advantage. The current investor narrative centers on the company's growth trajectory amid a favorable regulatory backdrop, highlighted by a larger-than-expected 2027 Medicare Advantage payment increase from CMS that has boosted sector sentiment. Additionally, Elevance is emerging as a player in pharmacy benefit management and healthcare services, driving debate around margin expansion and diversification beyond traditional insurance.…
ELV
Elevance Health, Inc.
$373.11
ELV 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Elevance Health, Inc.'s 12-month outlook, with a consensus price target around $449.10 and implied upside of +20.4% versus the current price.
Average Target
$449.10
0 analysts
Implied Upside
+20.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$393 - $492
Analyst target range
Elevance Health is covered by 21 analysts, with a consensus recommendation of 'Buy' (mean rating 1.82 on a 1-5 scale). The average target price is $447.62, implying approximately 20% upside from the current price of $373.11. The distribution leans bullish, with no sell ratings among the recent institutional ratings, which include Buy/Overweight actions from Truist, TD Cowen, Wells Fargo, and B of A Securities. The target price range spans from a low of $364.00 to a high of $498.00, representing a spread of $134. The high target of $498 assumes multiple expansion and accelerating growth, likely driven by the favorable Medicare Advantage payment environment and Carelon Services expansion. The low target of $364 prices in margin compression and competitive pressures, sitting slightly below the current price. Recent ratings have been stable, with no downgrades, indicating analyst conviction. The wide spread suggests elevated uncertainty, but the consensus remains bullish, supported by the strong buy ratio.
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Bulls vs Bears: ELV Investment Factors
Elevance Health presents a balanced investment case with compelling valuation and strong cash flows offset by margin compression and growth deceleration. The bull case is supported by a 20% upside to the average analyst target, a low beta, and a favorable Medicare Advantage regulatory tailwind. However, the bear case highlights declining margins, slowing revenue growth, and a sharp recent price drop that may indicate waning momentum. The single most important tension is whether the company can stabilize or expand margins in the face of rising operating costs; if margins improve, the stock could re-rate higher, but continued compression would validate the market's skepticism and limit upside. Currently, the evidence slightly favors the bull case due to the attractive valuation and analyst consensus, but the margin trend warrants close monitoring.
Bullish
- Attractive Valuation with 20% Upside: The trailing P/E of 13.92x is near the lower end of its historical range (9.15x-50.12x), and the forward P/E of 12.58x implies earnings growth. The average analyst target of $447.62 suggests approximately 20% upside from the current price of $373.11, offering a compelling risk-reward.
- Strong Free Cash Flow Generation: Elevance generated $6.29 billion in free cash flow over the trailing twelve months, providing ample capacity for dividends ($0.37B in Q2 2026) and share repurchases ($0.23B in Q2 2026). This cash flow supports shareholder returns and balance sheet strength.
- Favorable Medicare Advantage Tailwind: A larger-than-expected 2027 Medicare Advantage payment increase from CMS has boosted revenue visibility and sector sentiment. As a major player in government programs, Elevance is well-positioned to benefit from this regulatory tailwind, which could drive membership growth and margin expansion.
- Low Volatility with Beta of 0.683: With a beta of 0.683, Elevance is 32% less volatile than the S&P 500, making it a defensive holding in a portfolio. This lower risk profile is attractive for investors seeking stability in the healthcare sector.
Bearish
- Margin Compression Pressuring Earnings: Operating margin declined from 5.29% in Q2 2025 to 4.09% in Q2 2026, and net margin fell from 3.50% to 2.90% over the same period. This compression, driven by rising operating expenses, is eroding profitability and could weigh on earnings growth.
- Modest Revenue Growth Deceleration: Revenue growth slowed to 1.4% YoY in Q2 2026, down from 9.5% YoY in Q4 2025. The multi-quarter trend shows deceleration, indicating a mature business lacking near-term growth catalysts beyond pricing and membership gains.
- Recent Sharp Price Decline Signals Weakness: The stock dropped from $426.79 on July 14 to $373.11 on July 17, a decline of over 12% in three days. This sharp sell-off, despite no negative company-specific news, suggests profit-taking and potential vulnerability to further downside.
- High Short Ratio Indicates Bearish Sentiment: The short ratio of 3.32 days to cover implies elevated short interest relative to average volume. This indicates that a significant portion of the market is betting against the stock, which could amplify downside moves.
ELV Technical Analysis
Elevance Health's stock is in a broad uptrend, with a 1-year price change of +23.36%, outperforming the S&P 500's 18.35% gain. The current price of $373.11 sits at 52.5% of its 52-week range ($273.71 low to $436.24 high), indicating it is roughly in the middle of the range after a significant recovery from the March 2026 lows. This positioning suggests the stock is neither overextended nor deeply undervalued, reflecting a balanced risk-reward profile after a volatile period. Short-term momentum shows a divergence: the 1-month change is -4.64%, while the 3-month change is +15.50%, indicating a recent pullback from the June highs near $424. The 1-month decline contrasts with the strong 3-month rally, suggesting a temporary correction rather than a trend reversal, as the stock remains well above its 200-day moving average (not provided). The RSI and volume data are not available, but the sharp drop from $426.79 on July 14 to $373.11 on July 17 signals profit-taking after a 14% rally in the prior two weeks. Key support is at the 52-week low of $273.71, while resistance is at the 52-week high of $436.24. A breakout above $436 would signal a resumption of the uptrend, targeting new highs, while a breakdown below $273 would indicate a bearish reversal. With a beta of 0.683, Elevance is 32% less volatile than the S&P 500, making it a lower-risk holding in a portfolio, though the recent 30.6% maximum drawdown highlights that it is not immune to sharp corrections.
Beta
0.68
0.68x market volatility
Max Drawdown
-30.6%
Largest decline past year
52-Week Range
$274-$436
Price range past year
Annual Return
+23.4%
Cumulative gain past year
| Period | ELV Return | S&P 500 |
|---|---|---|
| 1m | -4.6% | -0.5% |
| 3m | +15.5% | +4.9% |
| 6m | -0.5% | +9.7% |
| 1y | +23.4% | +18.4% |
| ytd | +5.3% | +9.0% |
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ELV Fundamental Analysis
Revenue growth has been modest but steady, with the most recent quarter (Q2 2026) reporting $50.47 billion, up 1.4% year-over-year from $49.78 billion in Q2 2025. However, the multi-quarter trend shows deceleration: Q1 2026 revenue grew 2.6% YoY to $50.18 billion, while Q4 2025 revenue was $49.75 billion (up 9.5% YoY from $45.44 billion in Q4 2024). The Health Benefits segment contributed $42.72 billion in Q2 2026, while Carelon Services added $19.23 billion, with segment eliminations of $12.13 billion. The growth trajectory implies a mature business with steady, low-single-digit expansion, supported by membership growth and pricing, but lacking acceleration catalysts. Profitability remains solid: net income in Q2 2026 was $1.46 billion, with a net margin of 2.90%, down from 3.50% in Q2 2025. Gross margin was 89.12% in Q2 2026, reflecting the high-margin insurance business, but operating margin compressed to 4.09% from 5.29% a year ago, driven by higher operating expenses. The company is profitable, but margin compression is a concern, though still healthy relative to industry peers. The balance sheet is strong: debt-to-equity is 0.76, and the current ratio is 1.24, indicating adequate liquidity. Free cash flow (TTM) is $6.29 billion, providing ample capacity for dividends ($0.37 billion in Q2 2026) and share repurchases ($0.23 billion in Q2 2026). ROE is 12.9%, reflecting efficient capital use, and the company generates sufficient cash to fund operations internally, reducing reliance on external financing.
Quarterly Revenue
$50.5B
2026-06
Revenue YoY Growth
+1.4%
YoY Comparison
Gross Margin
89.1%
Latest Quarter
Free Cash Flow
$6.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ELV Overvalued?
Since net income is positive ($1.46 billion in Q2 2026), the primary valuation metric is the P/E ratio. The trailing P/E is 13.92x, while the forward P/E is 12.58x, implying the market expects earnings growth. The gap between trailing and forward P/E suggests a modest improvement in earnings, consistent with analyst estimates of $47.89 EPS for the current fiscal year. Compared to the industry average (not provided), Elevance's P/E of 13.92x appears reasonable for a managed care company, though without sector data, a precise premium/discount assessment is limited. Historically, Elevance's trailing P/E has ranged from 9.15x (Q1 2026) to 50.12x (Q4 2024), with the current 13.92x near the lower end of its historical band. This suggests the stock is relatively cheap compared to its own history, potentially indicating undervaluation or reflecting concerns about margin compression and growth deceleration. The P/B ratio of 1.77x is also below the 5-year average (not provided), reinforcing the value perception.
PE
13.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 9x~35x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Elevance's primary financial risk is margin compression, with operating margin declining from 5.29% in Q2 2025 to 4.09% in Q2 2026, and net margin falling from 3.50% to 2.90%. This pressure stems from rising operating expenses, which grew faster than revenue. The debt-to-equity ratio of 0.76 is manageable, but the current ratio of 1.24 indicates only adequate liquidity. Free cash flow of $6.29 billion provides a cushion, but if margin trends persist, earnings could disappoint, leading to multiple compression. Revenue concentration in government programs (Medicare, Medicaid) exposes the company to policy changes, though the recent CMS payment increase is a positive.
Market & Competitive Risks: The stock's trailing P/E of 13.92x is near the lower end of its historical range, suggesting the market already discounts some risks. However, if the broader market rotates away from healthcare or if managed care peers face headwinds, Elevance could see further multiple compression. The beta of 0.683 indicates lower market correlation, but the recent 30.6% maximum drawdown shows it is not immune to sector-wide sell-offs. Competitive pressures from UnitedHealth and Humana, as well as regulatory scrutiny on pharmacy benefit management, pose ongoing threats. The recent news of a Medicare Advantage payment increase is a tailwind, but any reversal or negative regulatory change could hurt sentiment.
Worst-Case Scenario: In a severe downturn, Elevance could face a combination of margin compression, membership losses, and regulatory headwinds, driving the stock to its 52-week low of $273.71. This would represent a 26.6% decline from the current price of $373.11. The analyst low target of $364.00 is only 2.4% below current levels, but the 52-week low implies a more realistic worst-case loss of approximately 27%. Historical max drawdown of 30.6% suggests that a drop to $259 (30.6% below current) is possible in extreme conditions, though the low beta and defensive nature of the business make such a scenario less likely.
