Elevance stock rating reiterated at Overweight by Cantor Fitzgerald
Investing.com
Published Jul 18, 2025 09:10AM ET
Investing.com - Cantor Fitzgerald has reiterated an Overweight rating on Elevance (NYSE:ELV) with a price target of $400.00. The stock, currently trading at $302.45, is near its 52-week low of $296.39, with InvestingPro analysis suggesting the shares are undervalued based on their proprietary Fair Value model.
The research firm expressed concerns about sizing a clean 2025 baseline for the company, noting that the year included one-time positive factors such as a second-quarter out-of-period settlement from a value-based care contract and anticipated tax benefits in the fourth quarter.
Cantor Fitzgerald indicated that bears worry about a low-single-digit EPS headwind from non-repeating positive factors from 2025 to 2026, potentially making the newly lowered $30 guidance for 2025 challenging to achieve.
The firm expressed confidence that most segments would improve margins in 2026, though Health Insurance Exchange (HIX) remains uncertain, with potential deterioration of the risk pool in 2026 expected to exceed that of 2025.
Additional risks identified include Medicaid margins, which Elevance indicated might take multiple rate cycles to align versus previous expectations of early 2026, and upcoming factors such as a second round of re-determination and potential work requirements in 2027 that could cause mismatches between rates and acuity.
In other recent news, Elevance Health reported its second-quarter 2025 earnings with adjusted earnings per share (EPS) of $8.84, which fell short of the forecasted $9.07. Despite this, the company exceeded revenue expectations with $49.4 billion, marking a 14% increase year-over-year. Elevance has revised its full-year adjusted EPS guidance to approximately $30. Analyst firms have reacted to these developments with changes in their evaluations. Guggenheim lowered its price target for Elevance to $360, maintaining a Buy rating, while Leerink Partners downgraded Elevance to Market Perform, reducing its price target to $310. BofA Securities also adjusted its price target to $350, citing concerns in the exchange and Medicaid markets but maintained a Neutral rating. Analysts have highlighted pressures in Medicaid and the Health Insurance Exchange (HIX) market as factors affecting Elevance's financial outlook. Despite these challenges, Elevance is focusing on strategic investments in AI and pharmacy services to stabilize margins and restore earnings power.
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