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On Friday, Bernstein analysts at SocGen Group raised their price target on Elevance Health Inc. (NYSE: ELV) to $585 from the previous $511, while maintaining an Outperform rating on the company’s shares. The revision reflects the analysts’ optimism about multiple factors contributing to the company’s earnings per share (EPS) growth. According to InvestingPro data, five analysts have recently revised their earnings estimates upward, with the company maintaining a "GREAT" financial health score of 3.07 out of 4.
The analysts expect Elevance to benefit from a recovery in government managed care margins in the second half of 2025 and into 2026. They also foresee a deceleration of healthcare service utilization, which is anticipated to normalize following the heightened levels seen during the COVID-19 pandemic. The company has demonstrated strong financial discipline, maintaining dividend payments for 15 consecutive years with a 15.54% dividend growth in the last twelve months.
Elevance’s valuations are currently considered to be at historically low levels, attributed to a period of flat EPS growth and existing policy uncertainty. Bernstein analysts believe that the policy risks, especially concerning Medicaid, are becoming clearer and more restricted in scope.
According to the analysts, the company’s current valuations stand at 0.6 times the market, but they anticipate a return to normal levels. This recovery is expected as government margins start to rebound towards their target levels and as policy uncertainty begins to diminish. The analysts’ positive outlook is based on these dynamics, suggesting a promising future for Elevance’s financial performance.
In other recent news, Elevance Health has reaffirmed its earnings guidance for the full year 2025, projecting adjusted earnings per diluted share between $34.15 and $34.85. This announcement follows a regulatory disclosure with the SEC, emphasizing the company’s expectations for stable Medicare Advantage membership. Meanwhile, the healthcare sector is experiencing scrutiny due to a DOJ investigation into UnitedHealth Group (NYSE:UNH)’s Medicare billing practices, which has raised concerns about potential regulatory impacts on Elevance Health and its peers.
Cantor Fitzgerald has maintained an Overweight rating for Elevance Health with a price target of $485, highlighting the company’s exposure to Medicaid policies. In contrast, JPMorgan has adjusted its price target for Elevance Health to $479, citing a mixed outlook for the company’s Health Benefits business but noting potential growth in its Carelon segment. President Trump’s recent supportive comments on social programs have positively influenced Elevance Health’s stock, reflecting investor confidence in the sector’s stability.
The company’s Medicaid segment is under pressure, but analysts anticipate possible margin improvements from state rate updates. Overall, Elevance Health’s financial outlook is closely tied to evolving Medicaid and Medicare policies, with analysts like JPMorgan suggesting potential improvements in these areas by 2026.
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