Elevance shares hold steady with buy rating and $624 price target from TD Cowen

On Tuesday, TD Cowen maintained a positive stance on Elevance (NYSE:ELV), reiterating a Buy rating and a price target of $624.00. The firm's outlook comes ahead of Elevance's earnings report, anticipated before the market opens on Wednesday.

Analysts from TD Cowen highlight that despite potential increases in Medicaid trend into the second quarter, as hinted by UnitedHealth Group (NYSE:UNH)'s late May commentary, Elevance is expected to deliver results that align with or surpass forecasts. This anticipation is supported by improving performance in the commercial margin.

Elevance's upcoming earnings report is particularly significant as it follows observations of a rise in year-to-year Medicaid Medical Loss Ratios (MLRs) by 20 basis points in the fourth quarter of 2023 and by 210 basis points in the first quarter of 2024. These statistics were derived from state filings and indicate a change in the portion of premiums used to pay for medical services.

The analyst from TD Cowen expressed confidence in Elevance's financial preparedness, suggesting that the company has set aside sufficient reserves to cover potential deviations from expected trends. This implies that even if the actual Medicaid trends are worse than anticipated, Elevance's financial results should not be adversely affected.

Investors and market watchers are now looking forward to Elevance's financial disclosures, which will provide a clearer picture of the company's performance and its ability to manage the changing dynamics in the Medicaid space. The report will also offer insights into the overall health of the company's business segments and its financial resilience.

The reiterated Buy rating and price target are significant indicators of TD Cowen's continued confidence in Elevance's business model and financial health, suggesting that the company remains a solid investment despite the evolving healthcare landscape.

In other recent news, Elevance Health Inc. has been the subject of several analyst reports and strategic partnerships. The company received an Overweight rating from Morgan Stanley, emphasizing Elevance's diversified offerings and resilience against regulatory and economic challenges. Meanwhile, Mizuho Securities raised the stock's price target to $585 from $575, adjusting its adjusted earnings per share estimates for 2024 and 2025 by $0.10.

RBC Capital Markets also adjusted its stock price target for Elevance, increasing it to $575 from $574, reflecting the company's stronger guidance. Additionally, UBS raised its price target on Elevance shares to $605 from $585, highlighting the company's recent elaboration on its collaborative care delivery relationship partnership.

Wells Fargo raised the price target on Elevance Health to $600 from $557 following the company's strong first-quarter results for 2024 while maintaining an Overweight rating.

InvestingPro Insights

As Elevance (NYSE:ELV) prepares to release its earnings report, insights from InvestingPro suggest a robust financial outlook for the company. With a market capitalization of $123.33 billion and a P/E ratio standing at 20.06, Elevance demonstrates substantial market confidence. The adjusted P/E ratio for the last twelve months as of Q1 2024 further refines this perspective to 17.31, underscoring the company's profitability potential. Revenue growth remains steady with a 6.89% increase over the last twelve months as of Q1 2024, a testament to Elevance's consistent performance in the healthcare sector.

InvestingPro Tips highlight that management's aggressive share buybacks and a 13-year streak of dividend raises are indicative of a strong commitment to shareholder value. Additionally, the company's cash flows are robust enough to cover interest payments, ensuring financial stability. With analysts predicting profitability for the current year and a history of profitability over the last twelve months, Elevance stands as a prominent player in the Healthcare Providers & Services industry. For investors seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/ELV. Don't forget to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering even more valuable insights to inform your investment decisions.

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