Elevance Health, Inc.
ELV
$407.50
-1.76%
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 plans, including Medicaid and Medicare Advantage. As the largest licensee of Blue Cross Blue Shield branded coverage in 14 states, Elevance holds a distinct competitive position, further strengthened by its expanding pharmacy benefit management and healthcare services arm, Carelon. The current investor narrative centers on the company's ability to navigate regulatory changes and margin pressures while capitalizing on growth opportunities in government programs and healthcare services, as evidenced by recent positive Medicare payment rate updates and strategic acquisitions.…
ELV
Elevance Health, Inc.
$407.50
Investment Opinion: Should I buy ELV Today?
Rating: Buy. ELV is a solid investment for value-oriented investors seeking exposure to the healthcare sector. The consensus analyst rating is 'Buy' with an average target price of $449.10, implying a 10.2% upside. The stock's low P/E of 13.92x and stable earnings make it an attractive risk/reward proposition.
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ELV 12-Month Price Forecast
The AI model assesses ELV as a moderate buy, given its attractive valuation and positive analyst sentiment. The main risk is the lack of revenue growth, which could limit upside. However, the recent Medicare payment increase and the company's strong market position provide a supportive backdrop. The stance would be upgraded if revenue growth accelerates above 5% or margins improve, and downgraded if regulatory changes negatively impact earnings.
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 +10.2% versus the current price.
Average Target
$449.10
0 analysts
Implied Upside
+10.2%
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' and a mean rating of 1.77 (where 1 is Strong Buy and 5 is Sell). The average target price is $449.10, implying an upside of 10.2% from the current price of $407.50. The distribution shows 10 analysts with Buy/Overweight ratings, 1 with Hold, and none with Sell, indicating a bullish sentiment. The target price range spans from $393.00 (low) to $492.00 (high), with the low target implying a 3.6% downside and the high target a 20.7% upside. The wide spread of $99 suggests significant uncertainty, likely due to regulatory and reimbursement risks. Recent ratings from firms like Truist, TD Cowen, and Wells Fargo have maintained positive stances, while no downgrades have been observed, reinforcing the constructive outlook.
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Bulls vs Bears: ELV Investment Factors
Elevance Health presents a balanced investment case with solid long-term momentum, a discounted valuation, and a favorable regulatory tailwind from Medicare payment increases. However, stagnant revenue growth and margin compression pose challenges. The bull case is currently stronger, supported by analyst consensus and a 10.2% upside to the average target. The key tension lies in whether ELV can reignite revenue growth and stabilize margins, as the current valuation already reflects conservative expectations. If growth remains elusive, the stock could face multiple compression, but if the company executes on its Carelon expansion and benefits from Medicare rate hikes, the upside potential is significant.
Bullish
- Strong 1-Year Outperformance vs S&P 500: ELV has delivered a 32.28% return over the past year, significantly outpacing the S&P 500's 18.65% gain. This demonstrates robust momentum and investor confidence in the company's strategic direction.
- Attractive Valuation with 10.2% Upside: Trading at a trailing P/E of 13.92x, ELV is at a 7.2% discount to the industry average of 15.0x. The average analyst target of $449.10 implies a 10.2% upside from the current price of $407.50.
- Positive Medicare Payment Rate Update: The CMS announced a larger-than-expected 2027 Medicare Advantage payment increase, boosting revenue visibility for managed care companies. This is particularly beneficial for ELV given its significant Medicare Advantage presence.
- Diversified Revenue Streams via Carelon: Carelon Services generated $19.23 billion in Q2 2026, contributing to a diversified business model beyond traditional health insurance. This segment helps mitigate risks associated with the core insurance business.
Bearish
- Revenue Growth Stalled at 1.4%: Q2 2026 revenue grew only 1.4% YoY to $50.47 billion, indicating a plateau. Over the past four quarters, revenue has remained in a narrow range of $49.75-$50.71 billion, suggesting limited top-line expansion.
- Declining Profitability Metrics: Net margin fell to 2.9% in Q2 2026 from 3.5% in Q1 2026 and 3.5% in Q2 2025. Operating margin also contracted to 4.1% from 5.3% in the prior quarter, reflecting margin pressure.
- High Debt-to-Equity Ratio of 0.76: ELV's debt-to-equity ratio stands at 0.76, indicating significant leverage. This could constrain financial flexibility and increase vulnerability to rising interest rates or earnings shocks.
- Recent Price Volatility and Drawdown: The stock experienced a -26.49% max drawdown over the past year and recently dropped from a July high of $436.24 to $407.50. This volatility may deter risk-averse investors.
ELV Technical Analysis
Elevance Health's stock has demonstrated a robust long-term uptrend, with a 1-year price change of +32.28%, significantly outperforming the S&P 500's +18.65% over the same period. The current price of $407.50 sits at 78.3% of the 52-week range (between $274.84 low and $436.24 high), indicating the stock is trading closer to its highs but has pulled back from the peak. This positioning suggests underlying momentum but also potential resistance near the upper end of the range, as the stock has recently retreated from its July high of $436.24.
Beta
0.70
0.70x market volatility
Max Drawdown
-26.5%
Largest decline past year
52-Week Range
$275-$436
Price range past year
Annual Return
+32.3%
Cumulative gain past year
| Period | ELV Return | S&P 500 |
|---|---|---|
| 1m | +4.2% | -0.4% |
| 3m | -1.9% | +4.5% |
| 6m | +40.7% | +13.9% |
| 1y | +32.3% | +19.0% |
| ytd | +15.0% | +12.9% |
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ELV Fundamental Analysis
Elevance Health's revenue trajectory remains stable, with the most recent quarter (Q2 2026) reporting $50.47 billion, a modest 1.4% year-over-year growth from $49.78 billion in Q2 2025. Over the past four quarters, revenue has ranged from $49.75 billion to $50.71 billion, indicating a plateau rather than acceleration. The Health Benefits segment generated $42.72 billion, while Carelon Services contributed $19.23 billion, with segment eliminations of $12.13 billion, highlighting the diversified revenue streams but also the maturity of the core insurance business.
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?
Given Elevance's positive net income of $1.46 billion in Q2 2026, the trailing P/E ratio of 13.92x is the primary valuation metric, with a forward P/E of 13.76x, indicating the market expects stable earnings. The gap between trailing and forward P/E is minimal, suggesting no significant growth expectations priced in. Compared to the industry average P/E of 15.0x (as per valuation data), Elevance trades at a 7.2% discount, which is justified by its lower growth rate and regulatory pressures. Historically, Elevance's P/E has ranged from 9.15x (Q1 2026) to 50.12x (Q4 2024), with the current level near the lower end of its historical band, suggesting the market is pricing in conservative expectations.
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: ELV's financial health shows moderate leverage with a debt-to-equity ratio of 0.76, which could amplify earnings volatility. The company's net margin has declined to 2.9% in Q2 2026 from 3.5% a year ago, indicating operational inefficiencies or rising medical costs. Revenue growth has stalled at just 1.4% YoY, suggesting a mature core business with limited expansion. Additionally, the company's free cash flow of $6.29 billion TTM is positive but may be pressured by ongoing investments in Carelon and regulatory changes. The payout ratio of 27% and dividend yield of 1.97% provide some income support but are not sufficient to offset fundamental growth concerns.
FAQ
Key risks include regulatory changes in government programs like Medicaid and Medicare, which could reduce reimbursement rates and pressure margins. Financial risks include a debt-to-equity ratio of 0.76, which increases vulnerability to interest rate hikes. Competitive risks from other insurers could lead to membership losses. Additionally, the stock's recent volatility, with a max drawdown of -26.49%, highlights market risk. The most severe risk is a combination of regulatory cuts and rising medical costs, which could lead to a -32.6% downside to the 52-week low.
The 12-month forecast is moderately bullish, with a base case probability of 50% targeting $430-$460, aligning with the average analyst target of $449.10. The bull case (30% probability) targets $449-$492, driven by Medicare rate increases and Carelon growth. The bear case (20% probability) targets $393-$420, reflecting regulatory and margin risks. The most likely scenario is the base case, assuming stable but modest growth.
ELV is undervalued relative to its industry, trading at a trailing P/E of 13.92x versus the industry average of 15.0x, a 7.2% discount. Its forward P/E of 13.76x indicates the market expects stable earnings. Historically, the stock's P/E has ranged from 9.15x to 50.12x, and the current level is near the lower end, suggesting conservative expectations. The market is pricing in limited growth, which could be an opportunity if the company exceeds expectations.
ELV is a good buy for value investors seeking a stable healthcare stock with a 10.2% upside to the average analyst target of $449.10. The stock trades at a 7.2% discount to its industry peers, with a P/E of 13.92x, and offers a dividend yield of 1.97%. However, the low revenue growth of 1.4% YoY and margin pressures are concerns. It is best suited for investors with a medium-to-long-term horizon who can tolerate regulatory uncertainty.
ELV is more suitable for long-term investment due to its stable business model, low beta of 0.696, and dividend yield of 1.97%. The stock has shown strong long-term appreciation, with a 1-year return of 32.28%, but short-term volatility is possible, as seen in the recent pullback from $436.24. A minimum holding period of 3-5 years is recommended to ride out regulatory cycles and benefit from the company's strategic initiatives in Carelon and government programs.
