Elevance Health (ELV) Rallies 11.8% YTD: More Room to Run?

Core Insights - Elevance Health has a market capitalization of $122.6 billion and is recognized as one of the largest publicly traded health benefits providers in the U.S. The company's prudent capital deployment history contributes to its notable price appreciation [1] - The consensus estimate for Elevance Health's full-year 2024 revenues is approximately $172.1 billion, reflecting a 1.1% increase from the previous year, supported by growth in product revenues and administrative fees [1] Financial Performance - Elevance Health's shares have increased by 11.8% year-to-date, outperforming the industry growth of 3.4%, driven by strong operations, new Medicaid contracts, and optimization efforts [5] - The Zacks Consensus Estimate for Elevance Health's 2024 earnings is $37.26 per share, indicating a 12.4% year-over-year increase, with the company having beaten earnings estimates in the last four quarters [19] Business Expansion - The expansion of services to customers and new client acquisitions positively impact Elevance Health's Carelon business, including a partnership with Clayton, Dubilier & Rice to enhance access to value-based care [2] - The company has entered an agreement to acquire Kroger's Specialty Pharmacy business, which is expected to enhance Carelon Rx's access to limited distribution drugs and expand its infusion and pharmacy businesses, with an anticipated 12% year-over-year increase in operating income from this segment in 2024 [14] Shareholder Value - Elevance Health has consistently paid dividends and repurchased shares, with $2.7 billion in share repurchases in 2023 and an additional $566 million in Q1 2024, leaving $3.6 billion remaining under its buyback authorization [8] Membership Trends - The company's total medical membership decreased by 1.2% year-over-year in 2023 and is expected to decline to 46.4 million in 2024 from 47 million in 2023, which may impact premium generation [9]