2024-04-22 16:50:54 ET
Summary
- Elevance Health Inc.'s Q1 earnings echoed various risk factors worth considering.
- We think a softer insurance pricing environment is likely, which could coalesce with our bearish outlook on Elevance's asset allocation.
- Lower cost ratios are possible. However, Elevance's planned labor streamlining raises concerns about the industry's outlook.
- Positives such as synergetic growth from Carelon and a well-rounded revenue mix exist.
- However, Elevance's price multiples phase out much of the good news, as they suggest the stock has priced this in.
This article dials in on Elevance Health, Inc. ( ELV ) , a U.S.-based long-term insurance health company whose stock we last covered in June . Although we maintained our bullish outlook, our previous Elevance Health article downgraded the stock to a buy rating from a previous strong buy rating.
As visible in the diagram below, the rating more or less ticked all the boxes as Elevance Health returned about 11%. However, it is time to revise Elevance Health's prospects, especially considering its first-quarter earnings beat....
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For further details see:
Elevance Health: Overlooked Risks Have Appeared (Rating Downgrade)