A Fresh Look at Elevance Health (ELV) Valuation Following Coverage Expansion and Analyst Upgrades

Elevance Health (ELV) recently updated its medical policy to include coverage for histotripsy, a noninvasive therapy for liver tumors. At the same time, multiple analysts have revisited their outlooks for the company, reflecting evolving investor sentiment.

See our latest analysis for Elevance Health.

Elevance Health’s broadened coverage for histotripsy arrives alongside notable market volatility. After a dip of nearly 10% in the last month and a strong 14.6% rebound over the previous 90 days, the company’s share price has struggled to find steady momentum. Its 1-year total shareholder return of -22.8% points to lingering investor caution despite recent innovations and growing revenue. Long-term performance has also been underwhelming, so the latest medical expansion and policy coverage could prove pivotal for sentiment moving forward.

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With shares still trading at a meaningful discount to analyst price targets, but recent gains fueling questions about sustainability, investors must weigh whether Elevance Health is undervalued or if the market has already accounted for its growth potential.

Most Popular Narrative: 18.6% Undervalued

With Elevance Health closing at $316.62 and the most widely followed narrative pointing to a fair value near $389, there is a sizable difference between price and what’s justified by earnings projections. This gap reveals a key debate about the company’s growth trajectory and profit recovery.

The company is aggressively leveraging advanced analytics, digitization, and AI-enabled tools to streamline clinical workflows, automate processes, reduce fraud, and improve cost management. These initiatives are expected to lower administrative costs, increase operational efficiency, and gradually stabilize or expand net margins.

Read the complete narrative.

Want to know what financial leap drives that ambitious price target? The narrative is built on game-changing growth forecasts and a bold margin rebound, along with a profit multiple that might surprise you. Uncover the assumptions powering this projection and see what lies behind the optimism.

Result: Fair Value of $389 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent cost pressures in Medicaid and delayed rate adjustments could threaten margin recovery and slow Elevance Health’s anticipated turnaround.

Find out about the key risks to this Elevance Health narrative.

Build Your Own Elevance Health Narrative

If you want to test your perspective or dive deeper into the numbers, you can build your own story for Elevance Health in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Elevance Health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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