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On Wednesday, Barclays (LON:BARC) reiterated its Overweight rating on Elevance Health (NYSE:ELV) with a steadfast price target of $522.00. According to InvestingPro data, the stock is currently trading near its 52-week low, with analysis suggesting it may be undervalued at current levels. The healthcare provider, with a market capitalization of $86.7 billion, has seen 15 analysts revise their earnings estimates downward for the upcoming period. The decision follows Elevance’s updated first-half earnings per share (EPS) guidance, which is now expected to represent 60% of the full-year figures, a slight dip from the previously projected "more than 60%". Analysts at Barclays adjusted their second-quarter EPS forecast for Elevance downward from $9.53 to $8.70, attributing the change to a 0.50% increase in the medical loss ratio (MLR). Despite these adjustments, the company maintains strong financial metrics, with InvestingPro reporting a solid financial health score and revenue growth of 6.63% over the last twelve months. They maintained their full-year 2025 EPS estimate of $34.52, anticipating general and administrative cost savings to provide some balance.
Elevance’s revision of its first-half EPS cadence was influenced by the ongoing high trends in the Individual Affordable Care Act (ACA) market and a slower-than-expected Medicaid recovery. Despite the adjustment for the second quarter, Barclays analysts remain confident in Elevance’s performance, sustaining their price target based on a 12.5 times price-to-earnings (P/E) multiple applied to their 2026 EPS projection of $40.68.
In detail, the firm’s analysis predicts that while the second quarter may see some financial pressure, the full year should align with their expectations. The unchanged price target reflects this sentiment and suggests that the analysts see the current adjustments as a minor hiccup in the overall growth trajectory of Elevance.
According to the analyst, "Given the elevated trend in Individual ACA and slower Medicaid recovery, ELV revised its 1H EPS cadence commentary to 60% of full-year vs. previous expectation of ’more than 60%’. We bring down our 2Q EPS from $9.53 to $8.70 on 50 bps higher MLR, but maintain our full-year 2025 EPS estimate of $34.52 assuming some G&A offset. With that we maintain our PT of $522 on an unchanged 12.5x P/E on our 2026 EPS of $40.68."
The maintenance of the $522 price target by Barclays indicates their continued confidence in Elevance’s market position and future earnings potential, despite the short-term revisions to the company’s financial outlook. The company has demonstrated its commitment to shareholder returns, having raised its dividend for 14 consecutive years with a current yield of 1.82%. Discover more comprehensive insights about Elevance Health and access detailed financial analysis through InvestingPro’s exclusive research reports, available for over 1,400 US stocks.
In other recent news, Elevance Health has reaffirmed its earnings guidance for the full year of 2025, projecting adjusted earnings per share to range between $34.15 and $34.85. The company also reiterated its benefit expense ratio guidance, anticipated to be around 89.1%. In a significant legal development, Elevance Health, along with other major insurers, is named in a False Claims Act complaint alleging illegal kickbacks paid to brokers for Medicare Advantage plan enrollments. This lawsuit, initiated by the U.S. Department of Justice, underscores the gravity of the allegations and potential financial repercussions for the companies involved.
In corporate governance matters, Elevance Health’s shareholders elected three directors at the recent Annual Meeting, approved executive compensation, and ratified Ernst & Young LLP as the independent auditor for 2025. On the analyst front, Cantor Fitzgerald maintained an Overweight rating on Elevance Health with a price target of $485, noting the company’s favorable performance relative to peers. Similarly, Bernstein reiterated an Outperform rating with a $585 price target, highlighting Elevance’s strong first-quarter results for 2025, where adjusted earnings per share exceeded consensus estimates by 5%.
Elevance’s revenue for the quarter reached $48.9 billion, surpassing expectations, while the Carelon division reported a robust 37.9% year-over-year revenue increase. The Carelon division’s growth was driven by pharmacy volume increases and enhanced performance in risk-based capabilities. Bernstein analysts expressed confidence in Elevance’s strategy to expand its services business, aiming to broaden its impact in the healthcare sector.
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