Elevance Health's Medicaid, ACA Margin Outlook Support Earnings Growth, RBC Capital Markets Says

MT Newswires Live10-22

Elevance Health's (ELV) improving Medicaid and individual Affordable Care Act margin expectations are lending confidence to earnings growth outlook, RBC Capital Markets said in a Wednesday note.

The company raised its 2026 adjusted EPS guidance to at least $29 and reaffirmed its outlook for at least 12% EPS growth in 2027.

RBC said Elevance's Medicaid business beat management's internal expectations, prompting a slightly better margin outlook.

Management continues to view 2026 as the trough for Medicaid margins and expects improvement in 2027, supported by rate catch-up and medical cost-management initiatives.

Elevance also expects full-year operating margins in its individual ACA business to be modestly higher than previously forecast.

RBC Capital Markets maintained its sector perform rating on Elevance Health and raised its price target to $455 from $424.

Elevance shares were 3% higher in Thursday trading.

Price: 447.20, Change: +13.07, Percent Change: +3.01

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