Core Insights - Elevance Health, Inc. is restructuring its Medicare strategy by exiting underperforming Medicare Advantage markets and the standalone Part D segment to protect profitability and enhance competitiveness [1][8] - The company is focusing resources on Medicare Advantage HMO and dual-special needs plans (D-SNPs), which yield stronger margins and consistent enrollment growth [2][8] - The exit will affect approximately 150,000 of Elevance's 2.3 million Medicare Advantage members, reflecting a broader industry trend of insurers recalibrating to safeguard margins amid rising medical costs [3][5] Financial Outlook - Elevance has revised its 2025 adjusted EPS forecast to about $30, down from a previous range of $34.15–$34.85, in response to increasing medical costs [4][8] - The Zacks Consensus Estimate for Elevance's 2025 earnings is projected at $29.88 per share, indicating a 9.6% decline from the previous year [11] - The company's trailing 12-month return on capital is 10.4%, significantly above the industry average of 7.4%, suggesting it can navigate challenges effectively [2] Market Position - Elevance's exit from the standalone Part D segment will reduce choices for beneficiaries, as it ranks as the sixth-largest provider in this space [5] - Other major players like UnitedHealth Group and Molina Healthcare have also adjusted their forecasts for 2025, indicating a trend across the industry [4] - Elevance's stock has declined by 14.6% year-to-date, compared to a 2.9% decline in the industry [7] Valuation Metrics - Elevance trades at a forward price-to-earnings ratio of 10.06, lower than the industry average of 14.90, and currently holds a Value Score of A [10]