Elevance Health’s next earnings to likely mirror 2025 like tougher backdrop
Investing.com -- Deutsche Bank downgraded Elevance Health to Hold from Buy, saying 2026 is shaping up to look much like 2025 as the health insurer faces a tougher operating backdrop and limited earnings upside.
The bank cut its price target to $320 from above the current share price of about $345, implying downside of roughly 7%. It also lowered its earnings estimates and now expects Elevance to post adjusted earnings of $26.72 in 2026, below the Street’s $27.21 forecast.
Deutsche Bank said Elevance’s reaffirmed 2025 earnings guidance of about $30 per share points to a weaker baseline for 2026 once nonrecurring items are stripped out.
Excluding roughly $3 of discrete items, the bank estimates a starting point closer to $27 for next year, with further pressure from a challenging rate environment, higher medical use, and ongoing regulatory uncertainty in the managed care business.
The analysts said Elevance’s initial guidance for 2026 is likely to be cautious and broadly in line with consensus, reflecting limited near-term visibility.
Analysts described 2026 as a year focused more on execution than growth as the company works through market and policy changes.
On the business mix, Deutsche Bank expects commercial results to remain relatively solid, supported by fee-based membership growth from national account wins and renewed pricing that already reflects higher cost trends. That strength is likely to be offset by weakness in the Affordable Care Act segment, where membership is expected to fall sharply as enhanced subsidies are set to expire.
With earnings estimates moving lower and the shares still trading above Deutsche Bank’s revised target, the bank said the risk-reward no longer supports a Buy rating.
