ELV Stock Forecast & Price Target

Elevance Health reported a 10% year-over-year increase in OEP membership, with expansion into new markets in 2025 contributing to this growth while managing attrition in core Blue states. Management anticipates a minimum 2% Medicare Advantage margin in 2026, reflecting a positive shift in pricing and membership mix, particularly through a focus on Dual-Eligible Special Needs Plans (D-SNPs). The company's strong performance in ASO and Medicaid, paired with favorable market dynamics and a successful growth strategy, bolsters a positive outlook for Elevance Health as it continues to leverage its scale and brand strength across multiple healthcare services.

Elevance Health is facing a negative outlook due to its expectation of breakeven Medicaid margins for 2025, indicating a projected ~100 basis points deterioration in the second half of the year. The company anticipates significant headwinds in 2026, including a projected $2.50 year-over-year impact from Medicaid, a moderate decline in aggregate Carelon earnings, and a reduction in Commercial Risk membership by high single digits, largely due to deliberate pricing strategies leading to member attrition. Furthermore, the lowered earnings per share (EPS) estimates for 2026 reflect a cautious stance on potential earnings recapture, factoring in adverse regulatory changes and challenges in growing its government and pharmacy benefit management segments.