Update shared on17 Oct 2025
Fair value Increased 3.78%Analysts have raised their price target for Elevance Health by approximately $14 to $375. This reflects increased earnings visibility and expectations for a sector rotation into healthcare, despite ongoing margin pressures in certain business lines.
Analyst Commentary
Recent analyst research reveals a divided view on Elevance Health, reflecting both confidence and caution regarding the company's near-term outlook and long-term prospects. The following highlights summarize key optimistic and cautious viewpoints from the latest Street research and commentary.
Bullish Takeaways- Bullish analysts have raised price targets, citing greater earnings visibility and the potential for sector rotation to support valuation multiples.
- Upward target revisions are often linked to analysis of Medicare Advantage ratings, which are seen as drivers of medium-term growth despite industry volatility.
- Solid performance across business lines outside Medicaid has supported a generally stable outlook and outperformance ratings, even in the face of ongoing cost pressures.
- Some expect a margin recovery phase beginning in 2026 for managed care, with select companies benefiting more from Medicare Advantage improvements.
- Bearish analysts remain cautious on the pace of recovery in the Medicaid segment, noting elevated acuity levels and limited visibility into margin normalization during late 2025.
- Uncertainties remain about uniform margin recovery in Medicare Advantage across the industry. This suggests that not all payers, including Elevance, will benefit equally as conditions improve.
- Recent comments from company management have highlighted persistent cost pressures that may cap near-term earnings upside and temper valuation expansion.
What's in the News
- Enhanced subsidies for Affordable Care Act health-insurance plans are at the center of U.S. government shutdown negotiations. Decisions on their extension directly impact tens of millions, including Elevance Health's marketplace business (The Wall Street Journal).
- Federal judges in Texas and Connecticut have dismissed lawsuits challenging the constitutionality of the Medicare Drug Price Negotiation Program. This move solidifies the federal government's position and could potentially affect reimbursement dynamics for Elevance and other major insurers (The Hill).
- The American Physical Therapy Association has joined a federal antitrust lawsuit alleging that Elevance Health and other insurers participated in a conspiracy to underpay providers for out-of-network services, increasing legal scrutiny on pricing practices.
Valuation Changes
- Consensus Analyst Price Target has risen from $361.39 to $375.05, reflecting a modest upward revision in fair value estimates.
- Discount Rate remains unchanged at 6.78%, indicating a stable cost of capital assumption in updated analyses.
- Revenue Growth forecasts have fallen from 6.73% to 5.60%, signaling tempered expectations for top-line expansion.
- Net Profit Margin has edged down slightly from 3.23% to 3.19% in recent estimates.
- Future P/E multiple has increased from 12.19x to 13.23x, reflecting a higher valuation for projected earnings.
Disclaimer
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