Elevance Health (ELV) Plunges 1.50% to Record Low on Earnings Concerns

Elevance Health (ELV) shares fell 1.50% today, marking the third consecutive day of decline, with a total drop of 2.52% over the past three days. The stock price hit a record low today, with an intraday decline of 2.39%.

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 had a return of -44.68%, with a benchmark return of -100.00% and an excess return of 55.32%. The strategy's CAGR was -21.09%, indicating a decline in value, and had a maximum drawdown of 0.00%, suggesting that the strategy did not experience any further losses after the initial sell-off.

Elevance Health is facing a challenging market environment due to expectations of a year-over-year decline in earnings, despite higher revenues. This has contributed to a negative sentiment surrounding the stock, exacerbated by multiple securities class action lawsuits filed against the company.

Analysts have also weighed in on the company's prospects. Guggenheim recently reduced its price target for Elevance Health from $518 to $447, citing increased medical loss ratios and downside trends impacting earnings expectations for 2025. However, the consensus recommendation from brokerage firms remains "Outperform," with an average price target suggesting significant upside from the current price.

Despite the challenges, Elevance Health reported strong earnings growth at the start of 2025, with adjusted diluted EPS showing over 10% growth year-over-year. However, the company is grappling with elevated cost trends in Medicaid, which are impacting its benefit expense ratio, and higher-than-expected costs in the first quarter. These financial performance metrics are crucial for investors to consider as they evaluate the company's future prospects.