Elevance Health's analyst price target has increased by approximately $14 to $389. Analysts cite firmer profit margin expectations, even though the managed care sector continues to face challenges to revenue growth.

Analyst Commentary

Recent research coverage of Elevance Health presents a mix of optimism for the company’s long-term potential and caution surrounding near-term headwinds. The following outlines key analyst perspectives impacting the stock's outlook and valuation.

• Bullish analysts highlight a recent increase in price targets, with some firms raising their forecasts for Elevance Health in response to improved earnings visibility and firmer profit margin expectations.
• Earnings projections have benefitted from greater confidence in the company’s ability to manage key operational challenges, especially within Medicare Advantage, which is seen as entering a potential margin recovery phase in the coming years.
• Certain research notes point to stable performances across non-Medicaid business lines, which supports sustained overall growth despite sector-level pressures.
• Adjustments to price targets also reflect a broader rotation into the healthcare sector, with Elevance Health positioned to benefit from industry trends favoring stronger managed care firms.

• Bearish analysts express caution about persistent cost pressures in Medicaid, citing higher than expected patient acuity and uncertain timing for margin recovery, especially through the latter part of 2025.
• There is concern that industry-wide changes, such as challenging plan rating cut points, may limit Elevance Health’s ability to outperform peers in Medicare Advantage, potentially leading to slower revenue recovery relative to consensus expectations.
• Some recent projection adjustments have lowered price targets, reflecting greater recognition of execution risks and the possibility that certain headwinds will weigh on earnings in the near term.
• While the company’s guidance has been reaffirmed, analysts highlight limited upside to margins until visibility improves, particularly within the Medicaid and healthcare exchange segments.

What's in the News

• Many enrollees of Affordable Care Act plans are facing hefty premium increases for 2026, with average premiums projected to rise by 26% according to research nonprofit KFF. Elevance Health is among the major insurers affected (The Wall Street Journal).
• Enhanced subsidies for ACA health insurance plans are set to expire by year end. Their extension is a central issue in ongoing government shutdown negotiations, impacting Elevance Health and many industry peers (The Wall Street Journal).
• Federal judges in Texas and Connecticut rejected legal challenges to the Medicare Drug Price Negotiation Program. These rulings delivered setbacks to the pharmaceutical industry and firmed up future government pricing power over companies including Elevance Health (The Hill).

Valuation Changes

• Consensus Analyst Price Target has risen from $375.05 to $389.16. This reflects increased confidence in Elevance Health’s outlook.
• Discount Rate remains unchanged at 6.78%. This suggests similar perceived risk in future cash flows.
• Revenue Growth expectations have fallen significantly, dropping from 5.60% to 3.44%.
• Net Profit Margin projections have improved modestly, increasing from 3.19% to 3.44%.
• Future P/E Ratio has declined slightly, moving from 13.23x to 12.47x. This indicates lower expected valuation multiples.