In a report released today, Lance Wilkes from Bernstein maintained a Buy rating on Elevance Health (ELV – Research Report), with a price target of $585.00.
Lance Wilkes has given his Buy rating due to a combination of factors that suggest a positive outlook for Elevance Health. One of the key reasons is the anticipated recovery in government-managed care margins, particularly in Medicaid and Medicare Advantage (MA) markets. Wilkes expects Medicaid margins to improve as states adjust rates to account for post-Redetermination risk pools, with continued rate increases projected through 2026. Additionally, the MA market is expected to return to target margins over the next few years, supported by pricing discipline and faster membership growth in 2025.
Another factor influencing the Buy rating is the historically low valuation levels of Elevance Health, which are currently at 0.6 times the market. Wilkes believes these valuations will recover as government margins improve and policy uncertainties, particularly in Medicaid, become clearer and more limited. Furthermore, an upside scenario has been considered, which could increase the five-year EPS growth rate significantly, enhancing the long-term financial outlook of the company. As a result, the price target for Elevance Health has been increased to $585, reflecting confidence in the company’s potential for growth and recovery.
In another report released on March 20, Wells Fargo also maintained a Buy rating on the stock with a $478.00 price target.
Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ELV in relation to earlier this year.