Elevance Health (ELV) Drops 2.01% to Record Low Ahead of Earnings

Elevance Health (ELV) shares fell 0.14% today, marking the second consecutive day of decline, with a total drop of 1.03% over the past two days. The stock price hit a record low today, with an intraday decline of 2.01%.

The strategy of buying ELV shares after they reach a recent low and selling after one week resulted in a significant loss. Over the past five years, the strategy yielded a return of -40.72%, underperforming the benchmark return of 56.99% and delivering an excess return of -97.70%. The strategy's CAGR was -19.03%, with a maximum drawdown of -45.42% and a Sharpe ratio of -0.71, indicating substantial risk and volatility.

Elevance Health's upcoming quarterly report is anticipated to show a decrease in earnings despite higher revenues. The company's financial performance in early 2025 was robust, with a GAAP diluted EPS of $9.61 and an adjusted EPS of $11.97, indicating over 10% year-over-year growth.

Guggenheim recently lowered its price target for ELV from $518 to $447, citing increased medical loss ratios and potential adjustments to 2025 earnings expectations. Despite this reduction, the firm maintains a Buy rating. Other analysts, such as those from TD Cowen and Bernstein, have kept their Buy ratings with price targets of $484 and $585, respectively.

Elevance Health has seen positive operational developments, including the expansion of value-based oncology care to Medicare Advantage and significant growth in Carelon Services. The acquisition of CareBridge has also enhanced the company's home and community-based services. However, challenges such as elevated cost trends in Medicaid and higher-than-expected flu-driven costs in Q1 have impacted the benefit expense ratio.

Investors remain optimistic about Elevance Health despite mixed analyst activities and mounting legal pressures. The company's continued Buy ratings and high price targets from analysts reflect this optimism. Additionally, Elevance Health is trading at a lower forward earnings multiple compared to peers like UnitedHealth, which could influence investor sentiment and positioning within the sector.