Elevance Health (ELV) Stock: December 2025 Outlook After Q3 Earnings Beat, Legal Headwinds and New Analyst Targets

As of early December 3, 2025, Elevance Health, Inc. (NYSE: ELV) is trading around $331 per share, leaving the managed-care giant roughly 30% below its 52‑week high near $459, even after a strong third‑quarter earnings beat and renewed institutional buying. ^[1] Over the past 12 months the stock is down about 18%, significantly lagging the S&P 500. ^[2]

This article pulls together the latest news, forecasts and analysis available as of December 2, 2025, to give a comprehensive view of where Elevance Health stock stands now and what markets are pricing in for 2026 and beyond.

1. Where Elevance Health Stock Stands After December 2, 2025

Price, valuation and performance snapshot

Share price: Around $330–331 at the December 2 close and in early December 3 trading. ^[3]
52‑week range: Approximately $273.71 (low) to $458.75 (high). ^[4]
Market cap: Roughly $74 billion. ^[5]
Trailing EPS (TTM): About $24.3 per share, implying a P/E of ~13.5x. ^[6]
Forward P/E: Around 12x, based on 2025–2026 consensus earnings. ^[7]

According to performance data from PortfoliosLab, ELV has returned about –9% year‑to‑date and –18% over the last 12 months, while the S&P 500 is up roughly 16% YTD and 13% over one year. ^[8] That underperformance, plus a current drawdown of just over 40% from peak, underscores how sharply sentiment has cooled on the stock since late 2024. ^[9]

At the start of December, Elevance shares fell roughly 2.5% in a single session, leaving them more than a quarter below their 52‑week high, before stabilizing near $331 on December 2. ^[10] For value‑oriented investors, that combination of low‑teens earnings multiples and double‑digit trailing decline is exactly what has sparked the latest round of “turnaround” commentary.

2. Q3 2025 Results: Strong Top Line, Medicaid Caution

Elevance’s Q3 2025 earnings, released on October 21, are the core fundamental driver behind recent analyst updates and institutional buying. ^[11] Key highlights:

Operating revenue:$50.1 billion, up 12% year‑over‑year, driven by higher premium yields, recent acquisitions and growth in Medicare Advantage membership. ^[12]
Segment performance: Health Benefits revenue reached $42.2 billion (+10% YoY), while the Carelon services arm delivered $18.3 billion (+33% YoY) on the back of home‑health and pharmacy acquisitions and expansion of risk‑based solutions. ^[13]
Earnings: Diluted EPS of $5.32 and adjusted EPS of $6.03, with management reaffirming full‑year 2025 adjusted EPS guidance of about $30 and a benefit expense ratio around 90%. ^[14]
Profitability: Net income of roughly $1.2 billion, up 17.8% from about $1.0 billion in the prior‑year quarter. ^[15]

Wall Street’s reaction was initially positive: Reuters reported that adjusted EPS of $6.03 beat consensus by more than $1 per share, and a modestly better‑than‑feared medical loss ratio (MLR) of 91.3% vs. ~91.7% expected helped the stock jump over 7% in pre‑market trading that day. ^[16]

However, management also warned that elevated medical costs in the Medicaid business are likely to persist into 2026 and only gradually improve by 2027, particularly as sicker members remain on Medicaid following the post‑COVID redetermination process. ^[17] That “2026 as the low point” comment for Medicaid profitability has become a central part of the bear case, with some analysts cautioning it could constrain earnings growth for a third straight year. ^[18]

3. Legal and Regulatory Overhang: Medicare Stars and Securities Lawsuits

Medicare Advantage star ratings

A major 2025 story for Elevance has been its Medicare Advantage Star Ratings and related litigation with U.S. health regulators:

In August 2025, a federal judge in Texas rejected Elevance’s challenge to the 2025 Medicare Advantage star ratings for certain contracts, siding with the Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS). ^[19]
Elevance argued that CMS’s calculations wrongly caused one major contract to miss a higher star tier by a sliver, but the court concluded the company had not shown flaws in the methodology. ^[20]
The decision is expected to cost Elevance around $375 million in bonus payments and rebates tied to those star ratings for 2026. ^[21]

CMS’s 2025 Star Ratings, which were published in October 2024, drive quality bonus payments for 2026 and are central to profitability in Medicare Advantage. ^[22] The lost case means Elevance must absorb the earnings hit rather than recouping it via litigation.

Adding more uncertainty, the Trump administration recently proposed an overhaul of Medicare Advantage star ratings, including scrapping a set of quality measures and halting a Biden‑era plan that would reward plans specifically for improving outcomes among low‑income and disabled enrollees. ^[23] Any sweeping change in the star methodology or risk‑adjustment rules could alter future revenue and bonus pools for Elevance and its large‑cap peers.

Securities class actions and settlements

At the same time, Elevance faces ongoing securities‑law and class‑action overhang:

Multiple investor‑rights firms, including Bleichmar Fonti & Auld and Rosen Law Firm, have publicized class actions alleging that Elevance misled investors about the impact of Medicaid redeterminations on medical costs and its 2024 guidance. ^[24] These suits focus on claims that management under‑estimated the acuity and cost of Medicaid members who remained insured post‑redetermination—allegations the company disputes.
A shareholder lawsuit update published in October 2025 reiterated that investors who bought shares before April 2024 and held through the October 2024 Medicaid‑related guidance cut may have claims, underscoring that the litigation is still active. ^[25]

Separately, Top Class Actions highlighted a proposed $12.88 million settlement related to mental‑health treatment coverage involving Anthem‑branded plans (Anthem is now under the Elevance umbrella), reinforcing that the company continues to manage legacy legal exposures from prior branding and benefit designs. ^[26]

None of these suits have (yet) fundamentally changed Elevance’s capital position, but they contribute to headline risk and could affect valuation multiples if investors fear large settlements or structural changes in Medicaid profitability.

4. Fresh December 2, 2025 News: ‘Smart Money’ Buying and Turnaround Narratives

The most directly stock‑specific news dated December 2, 2025 is a new MarketBeat institutional‑ownership report:

Quant giant Arrowstreet Capital increased its stake in Elevance by 10.3% in Q2, adding over 88,000 shares to bring its total holdings to 942,596 shares, worth roughly $366.6 million and representing about 0.42% of the company. ^[27]
The article notes that Elevance trades around a P/E of 13–14x with a market cap near $73 billion, and it reiterates a quarterly dividend of $1.71 (about a 2.1% annual yield at current prices). ^[28]

While one hedge fund’s position is not a buy signal on its own, Arrowstreet’s increased stake is being interpreted as a vote of confidence in Elevance’s medium‑term earnings power at current valuations.

At the same time, a widely circulated AI‑assisted analysis piece, “Elevance Health: The Potential Turnaround the Market Isn’t Pricing In,” published late on December 1 and syndicated on December 2, argues that the stock appears undervalued relative to its growth drivers. ^[29] The article highlights:

12% Q3 revenue growth, driven by Medicare Advantage and acquisitions. ^[30]
Strategic acquisitions such as CareBridge and Paragon, which expand Carelon’s Medicaid and home‑health capabilities and support the company’s “whole health” strategy. ^[31]
Investments in AI‑enabled clinical support and digital tools to improve efficiency and member experience. ^[32]

The bullish thesis: short‑term margin pressure plus headline risk have pushed the stock well below what its long‑term cash‑flow profile justifies, setting up a potential multi‑year rerating if Elevance executes on its value‑based care strategy and Medicaid profitability troughs in 2026 as management expects. ^[33]

5. Analyst Ratings, Price Targets and Earnings Forecasts

Wall Street remains broadly positive on Elevance, though the tone is more cautious than in prior years.

Consensus ratings and price targets

Different aggregators paint a very similar picture:

MarketBeat:
- Consensus rating: Moderate Buy based on 23 analyst ratings (12 Buy, 11 Hold).
- Average 12‑month price target:$398.44, implying about 20% upside from a ~$331 share price.
- Target range: $297 (low) to $485 (high). ^[34]
StockAnalysis.com:
- 15 analysts covering ELV with a “Buy” consensus.
- Average target:$392.47, or roughly 19% upside, with the same $297–$485 range. ^[35]
- Recent updates include TD Cowen, Mizuho and J.P. Morgan, all maintaining Buy or Strong Buy ratings while trimming or nudging targets in the $380–$403 range following the October earnings call. ^[36]
Zacks Investment Research (snippet data):
- Average target around $380.68, again implying high‑teens upside. ^[37]
MarketWatch analyst estimates list an average target price near $378, based on around 25 ratings, broadly consistent with other sources. ^[38]

Taken together, these data suggest that most covering analysts see ELV as undervalued, but not a screaming bargain, with upside expectations clustered around 15–20% over the next year if earnings track guidance.

Earnings expectations

Consensus forecasts compiled by Yahoo Finance and StockAnalysis indicate:

2025 EPS: Around $30–30.3, up nearly 18% from 2024. ^[39]
2026 EPS: Expected to dip to the high‑$27 range (roughly –9% vs. 2025) as Medicaid margins bottom out and Medicare bonuses reset on lower star ratings. ^[40]
Revenue: Forecast to grow from about $200 billion in 2025 to roughly $206–207 billion in 2026, a mid‑single‑digit increase after the big post‑COVID expansion. ^[41]

In other words, Wall Street expects healthy revenue growth but a temporary earnings air pocket in 2026, largely because of Medicaid and star‑ratings dynamics rather than a collapse in the underlying franchise.

6. Dividend, Balance Sheet and Shareholder Returns

For income‑oriented investors, Elevance’s dividend profile is one of the stock’s more attractive features:

Trailing 12‑month dividend:$6.76 per share, typically paid as $1.71 quarterly. ^[42]
Yield: Around 2.0–2.1% at current prices. ^[43]
Dividend growth: Roughly 13% average annual growth over the past three years, and 13 consecutive years of dividend increases. ^[44]
Payout ratio: Around 28% of earnings, leaving ample room for reinvestment and future dividend hikes. ^[45]

Elevance also continues to return capital through share repurchases, with management noting it had returned $3.3 billion to shareholders year‑to‑date by Q3 2025. ^[46]

On the balance‑sheet side:

Debt‑to‑equity of roughly 0.7x,
Current ratio around 1.5x,
Return on equity in the low‑teens. ^[47]

Those metrics indicate a solid but not overly leveraged capital structure, which is important given the regulatory and litigation noise around the business.

7. Technical Picture as of December 2, 2025

Technically, ELV presents a mixed picture that mirrors the fundamental “good company, messy near term” narrative.

Data from Investing.com’s technical summary, as of the evening of December 2, 2025, show: ^[48]

Daily technical indicators: Overall “Strong Sell”, with many momentum indicators (RSI, Stochastics, MACD, Williams %R) skewed bearish.
Moving averages: A more balanced “Buy” signal, with shorter‑term (5‑ and 10‑day) averages just above the current price, while the 20‑ and 50‑day averages are slightly higher and still pointing to a recent downtrend.

PortfoliosLab’s risk metrics highlight that:

ELV’s 1‑year Sharpe ratio is negative (~–0.49), indicating poor risk‑adjusted returns versus the S&P 500.
The current drawdown is about 40%, with a particularly sharp peak‑to‑trough slide starting in September 2024 as Medicaid and legal concerns surfaced. ^[49]

From a purely technical standpoint, the stock still looks like it is working through a long repair phase, even if valuations and fundamentals are starting to attract institutional buyers again.

8. Key Risks and Opportunities Heading Into 2026

Main risks

Medicaid profitability and redeterminations
Elevated acuity in Medicaid populations, and the lag in resetting premium rates with states, are likely to pressure margins at least through 2026, according to management. ^[50] If costs stay higher for longer, earnings could undershoot current consensus.
Medicare Advantage star ratings and regulatory change
The $375 million hit from losing the star‑ratings lawsuit is already known, but the broader risk is that future CMS rule changes or Trump‑era proposals could further alter bonus structures and risk adjustment, affecting Elevance’s long‑term economics in Medicare Advantage. ^[51]
Litigation and reputational risk
Securities class actions and settlement negotiations may not be financially crippling on their own, but they consume management attention and could lead to disclosure changes or governance shifts that impact strategy. ^[52]
Policy uncertainty in ACA exchanges
Reuters notes that Elevance is also bracing for higher costs in ACA‑compliant individual plans as members front‑load care ahead of expected changes in premium tax credits in 2026. ^[53] Depending on the final policy path, this segment could either stabilize quickly or remain another drag.

Main opportunities

Value‑based care and Carelon expansion
Elevance’s strategy of building out Carelon (services, home health, pharmacy) and acquiring platforms like CareBridge and Paragon aims to shift more members into integrated, value‑based models that control costs and deepen relationships with high‑acuity patients. ^[54] If successful, this can improve long‑term margins and differentiate Elevance from commodity insurers.
AI‑driven efficiency and digital engagement
The company is investing in AI‑enabled clinical support, digital assistants and risk‑based analytics to streamline operations and enhance member experience. ^[55] Done well, these investments can both offset medical cost inflation and improve retention, especially in competitive Medicare Advantage markets.
Valuation re‑rating from depressed levels
A trailing P/E in the mid‑teens and forward P/E near 12x, with a ~2% dividend yield and high‑single‑digit expected revenue growth, looks inexpensive relative to historic valuations for high‑quality health plans—if earnings stabilize by 2027 as current forecasts suggest. ^[56]
Institutional accumulation
The December 2 Arrowstreet Capital filing is one data point in a broader pattern of large asset managers adding to ELV at lower prices, suggesting that “smart money” is willing to look through near‑term noise in favor of long‑term cash flows. ^[57]

9. Bottom Line: Is Elevance Health Stock a Buy After December 2, 2025?

Putting it all together:

Fundamentals: Q3 2025 showed strong revenue growth and an earnings beat, with management confident enough to reaffirm 2025 guidance despite Medicaid headwinds. ^[58]
Valuation: The stock trades on low‑teens earnings multiples, with a 2%+ dividend yield and a long history of dividend growth, at a time when consensus still sees mid‑teens EPS growth for 2025 and only a temporary dip in 2026. ^[59]
Sentiment and risk: Legal overhangs, star‑rating setbacks and Medicaid uncertainty have driven a 40% drawdown and negative 1‑year risk‑adjusted returns, leaving the stock underowned by momentum investors but increasingly interesting to contrarians and income investors. ^[60]

Most professional analysts still classify ELV as a Buy or Moderate Buy, with price targets clustering around $380–$400—roughly 15–20% above current levels—while recognising that 2026 is likely to be a trough year for Medicaid margins. ^[61]

For prospective investors, the key questions now are:

Do you believe Medicaid profitability and star‑rating pressure will ease by 2027, as management and consensus models suggest?
Are you comfortable owning a large, systemically important health insurer amid regulatory flux and periodic litigation headlines?
Does a ~2% yield plus potential high‑teens upside over 12–18 months adequately compensate you for those risks?

If your answer is broadly “yes,” Elevance Health increasingly looks like a quality franchise temporarily out of favor rather than a broken business. If your answer is “no,” it may make more sense to watch for clearer evidence that Medicaid margins and regulatory risks have peaked before committing capital.

Important: This article is for informational purposes only and does not constitute investment, legal or tax advice. Always do your own research and consider speaking with a licensed financial adviser before making investment decisions.