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Elevance Health (ELV) Lifts 2026 EPS Outlook, Is The Stock Still 11% Undervalued?

Simply Wall St · 2d ago

Elevance Health (ELV) is back in focus after reporting third quarter results with higher revenue and net income than a year earlier. The company also lifted its 2026 diluted earnings per share outlook to at least US$22.00.

Elevance Health’s recent guidance uplift comes after a strong run in the share price, with a 30-day share price return of 8.7% and an 18.6% gain year to date. The 1-year total shareholder return of 36.8% points to momentum that has built over the past year, even though the 3-year total shareholder return declined 2.8% and the 5-year total shareholder return rose 5.9%. This suggests investors are reacting more to the latest earnings, dividend affirmation and leadership changes than to longer term history.

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After that run, Elevance Health now sits at a crossroads. Is the recent jump just a catch up to its earnings outlook, or is investors’ optimism already largely priced in as valuation comes under the microscope next?

Most Popular Narrative: 11.5% Undervalued

Compared with Elevance Health’s last close at $420.07, the most followed narrative pegs fair value at $474.57, using a 7.28% discount rate and factoring in modeled earnings, margins and cash flows over the coming years.

Planned exits from Medicaid markets where Elevance Health does not see a path to sustainable performance, combined with efforts to improve rate alignment and mature care management in remaining contracts, is intended to move Medicaid operating margins higher from the expected 2026 trough and support longer term earnings quality.

See why 116 investors see Elevance Health as 11% undervalued.

Result: Fair Value of $474.57 (UNDERVALUED)

Still, the Elevance Health story can shift quickly if Medicaid margins stay under pressure or if medical cost trends in ACA and commercial plans run hotter.

Find out about the key risks to this Elevance Health narrative.

Next Steps

Feeling torn between the upbeat Elevance Health valuation story and the lingering questions on execution and capital risk? Act quickly, review the numbers yourself, then weigh up the 4 key rewards and 1 important warning sign.

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