Assessing Elevance Health’s Valuation After Earnings Beat Outlook Upgrade And Large Share Buybacks
Elevance Health (ELV) is back in focus after another earnings beat, a higher outlook, and ongoing multibillion dollar share buybacks. This combination puts management decisions and capital return front and center for investors.
See our latest analysis for Elevance Health.
At a share price of US$346.24, Elevance Health has seen short term share price momentum pick up with a 7 day share price return of 3.0%. However, the 1 year total shareholder return of a 9.6% decline and 3 year total shareholder return of a 25.5% decline point to a weaker longer term experience. The recent earnings beat, outlook upgrade, and large buybacks appear to be resetting how investors are thinking about its risk and growth profile.
If this earnings beat has you rethinking where you find growth in healthcare, it could be worth scanning our list of 25 healthcare AI stocks as another way to look at the sector.
With Elevance Health trading at US$346.24, a value score of 5, an implied discount to the average analyst price target, and sizeable buybacks in play, investors may ask whether this is a genuine entry point or whether future growth is already reflected in the current price.
Most Popular Narrative: 11.3% Undervalued
According to the most followed narrative, Elevance Health’s fair value of $390.54 sits meaningfully above the last close at $346.24, which is driving interest in whether the current price reflects its long term earnings power.
Elevance Health’s investment potential over the next 1-3 years lies in balancing risks associated with Medicaid declines, cost management, and regulatory uncertainties against growth opportunities in Medicare Advantage, value-based care, and digital health innovation. Its established market position and diversified portfolio provide resilience, but operational cost pressures and policy changes will be critical factors influencing performance.
Curious what sits behind that fair value gap and resilience callout? The narrative leans heavily on how earnings, margins, and future profit multiples interact over the next few years. The exact mix of assumptions around profit growth, member mix, and reinvestment is where the story really gets interesting.
Result: Fair Value of $390.54 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that fair value gap can close quickly if Medicaid membership pressures or persistent medical cost inflation hit earnings harder than this narrative anticipates.
Find out about the key risks to this Elevance Health narrative.
Next Steps
If this mix of positives and risks feels finely balanced, it may be worth acting while the data is fresh and forming your own view. You can start with 4 key rewards.
Looking for more investment ideas?
If you are weighing what to do next after Elevance Health, do not stop here. Widen your research so you are not relying on one story.
- Target long term compounding potential by checking out our list of 53 high quality undervalued stocks identified by the Simply Wall Street screener.
- Prioritize resilience and sleep better at night by reviewing companies in our 80 resilient stocks with low risk scores that aim to keep risk scores in check.
- Hunt for quality that is not yet crowded by the market with our screener containing 24 high quality undiscovered gems built from strong fundamentals.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com