ELV Stock Forecast & Price Target

Elevance Health's stock outlook is bolstered by a significant 10% year-over-year increase in membership, particularly from expansion in new markets, which has offset planned attrition in core Blue states. Management anticipates improvements in its Medicare Advantage margin of over 150 basis points year-over-year by 2026, driven by strategic pricing and a shift in membership mix, alongside strong performance in ASO driven by high retention and new wins. Additionally, favorable developments in Medicaid margins and an optimistic growth pipeline for complex populations position Elevance Health for substantial margin expansion, reinforcing expectations for over 12% EPS growth by 2027.

Elevance Health's negative outlook is primarily influenced by anticipated headwinds in its Medicaid segment, with management guiding for margins to be modestly below breakeven in 2025, reflecting a deterioration in the implied 2H25 Medicaid margin run-rate by approximately 100 basis points. Additionally, projected declines in commercial risk membership of high single digits and a significant drop of around 9% in Medicaid membership due to stricter eligibility requirements further compound the challenges. The company's earnings per share (EPS) estimates for 2026 have been lowered to $25.54, down from previous projections, as management faces multiple financial pressures, including reduced revenue from Carelon and diminished investment income.