Wells Fargo Downgrades Elevance Health to Overweight with PT of $330.

Wells Fargo Downgrades Elevance Health to Overweight with PT of $330.

Wells Fargo & Company has downgraded Elevance Health, Inc. (NYSE: ELV) to an "Overweight" rating with a new price target of $330. The downgrade comes despite the company's strong Q2 2025 financial results, which saw adjusted earnings per share (EPS) of $8.84, slightly below expectations of $8.91. Revenue surged 14% year-over-year (YoY) to $49.4 billion, while operating cash flow reached $2.1 billion [1].

Despite the positive financial performance, Wells Fargo cited concerns about the company's growth potential and execution in Medicare Advantage. The bank's analysts believe that the recent decline in Medicaid and ACA enrollment, coupled with increasing cost pressures, could negatively impact Elevance Health's future earnings [2].

Mizuho Financial Group, however, maintained its 'Buy' rating on Elevance Health with a price target of $342, highlighting the company's growth potential in Carelon and strong execution in Medicare Advantage. The company's low price-to-earnings multiple and significant presence in Seth Klarman's investment portfolio also contribute to its appeal as a value stock [1].

Elevance Health's Membership segment saw a decrease to 45.6 million, driven by lower enrollment in Medicaid and ACA. However, the company expects to stabilize margins through disciplined pricing, AI-enabled care management, and the expansion of Carelon's value-based and pharmacy services [1].

In a mixed technical environment, Elevance Health is facing more bearish indicators than bullish ones, with analysts split on the company's future direction. The stock price has risen by 4.01%, but technical indicators suggest weakness, and analyst expectations are not aligned with the price movement [2].

Overall, the downgrade by Wells Fargo reflects a cautious outlook on Elevance Health's future growth prospects, despite its recent strong performance. Investors should closely monitor the company's earnings and industry policy changes for additional clarity on its trajectory.

References:
[1] https://www.ainvest.com/news/elevance-health-q2-2025-results-mizuho-maintains-buy-rating-342-pt-2508/
[2] https://www.ainvest.com/news/stock-analysis-elevance-health-outlook-stock-mixed-technical-fundamental-signals-2508/