Evaluating Elevance Health (ELV) After New Buying Interest From Prominent Investors
Recent 13F filings showing multiple prominent investors adding to Elevance Health (ELV) have put the stock on many radar screens, as buyers point to the company’s scale, cost discipline, and steady capital returns.
See our latest analysis for Elevance Health.
That interest from large investors comes as Elevance Health’s share price has climbed 10.91% over the past month and 3.51% year to date, even though the 1 year total shareholder return is slightly negative at 2.47%. This suggests recent momentum is improving compared with longer term returns.
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So, with Elevance Health’s shares up recently but longer-term returns still lagging, and with the stock trading below some analyst targets and intrinsic estimates, is this a genuine opportunity or is the market already pricing in future growth?
Most Popular Narrative: 5.3% Undervalued
Elevance Health’s narrative fair value of about $387 sits slightly above the last close at $366.69, which frames the current pricing debate around its earnings power.
The analysts have a consensus price target of $370.444 for Elevance Health based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $507.0, and the most bearish reporting a price target of just $297.0.
Want to see what links mid single digit revenue growth, rising margins and a lower future P/E to that valuation gap? The earnings path and payout assumptions might surprise you.
Result: Fair Value of $387.16 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you still need to weigh the risk that elevated medical costs in Medicaid and ACA plans, or slower state rate adjustments, could keep margins under pressure for longer.
Find out about the key risks to this Elevance Health narrative.
Build Your Own Elevance Health Narrative
If you would rather test the numbers yourself than lean on this view, you can pull the inputs, tweak the assumptions and build a custom narrative in under three minutes, starting with Do it your way.
A good starting point is our analysis highlighting 4 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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