Anthem / Elevance Health (ELV) Stock Price: The Cheapest Large-Cap in Healthcare

The company formerly known as Anthem reported its Q1 2026 results on April 22, 2026 — and it beat on both revenue and adjusted EPS, raised its full-year guidance, reaffirmed operating cash flow, and returned $1.5 billion to shareholders in a single quarter.

The stock is down 14% from its 52-week high.

A $935 million CMS accrual for Medicare risk adjustment data is the primary reason. That single regulatory charge — disclosed alongside otherwise strong results — transformed what would have been a straightforward beat into a complicated narrative that the market hasn’t fully digested.

At $371 per share with a trailing P/E of approximately 14.7x and a forward P/E below 14x on raised guidance, Elevance Health is currently the cheapest mega-cap managed care company in the US market. Whether the CMS charge represents a one-time accounting resolution or the opening salvo of a larger regulatory exposure is the only question that actually matters for the stock in 2026.

The Name Change: Why This Is Still “Anthem Stock”

Anyone searching for “Anthem stock price” deserves a direct answer first. Anthem, Inc. changed its name to Elevance Health, Inc. in June 2022. The ticker also changed — from ANTM to ELV on NYSE. The business is the same company. The same Blue Cross Blue Shield insurance plans. The same 45-year history of the Anthem brand. The same Wellpoint ancestry.

The name change was a strategic signal: the company sees itself as a “health company” broadly, not just an insurer. The Carelon brand — covering pharmacy (CarelonRx), behavioral health, specialty care, and home health services — was deliberately separated from the insurance identity to capture higher-multiple revenue streams. A diversified health services company trades at 18–22x earnings; a pure insurance company trades at 12–14x.

Whether that rebranding ambition translates into multiple expansion is the long-term investment question. The P/E of 14.7x suggests the market hasn’t granted Elevance the services-company premium yet.

Q1 2026: The Beat and the Charge — Both in the Same Report

Elevance’s April 22, 2026 results were simultaneously strong and complicated. Understanding which number matters more is the key to interpreting the stock’s current discount.

The beat:

• Operating revenue: $49.5 billion (+1.5% YoY) — beat $48.2 billion consensus by 2.7%
• Adjusted diluted EPS: $12.58 — beat $11.03 estimate by 14.05% — the strongest quarterly beat in recent memory
• FY2026 adjusted EPS guidance raised from “at least $25.50” to “at least $26.75”
• Operating cash flow guidance reaffirmed: at least $5.5 billion for FY2026
• Capital return: $1.5 billion returned to shareholders in Q1 alone
• Benefit expense ratio: 86.8% — slightly elevated (+40 bps YoY) but within the guided range
• CarelonRx product revenue growing, contributing to the Health Benefits segment’s $42.5 billion Q1 operating revenue (+2.6% YoY)

The charge:

• $935 million accrual for CMS (Centers for Medicare & Medicaid Services) risk adjustment data — a regulatory reconciliation item tied to Medicare Advantage
• GAAP diluted EPS dropped to $8.00 (from $9.61 in Q1 2025) because of this charge
• Management acknowledged: “the final amount will be determined through the resolution process,” suggesting the $935M could move up or down

The divergence between adjusted EPS ($12.58, beat) and GAAP EPS ($8.00, decline) creates exactly the kind of analytical uncertainty that forces less sophisticated investors to sell first and read later. The adjusted number excludes the CMS charge. The GAAP number includes it. Both are technically accurate representations of different things.

CEO Gail Boudreaux’s framing was measured: “Our first quarter results exceeded expectations, reflecting underlying business strength and improving claims experience. We are raising our full-year adjusted EPS guidance, supported by greater visibility into the balance of the year.”

That language — “greater visibility” — is specific. Management typically does not raise guidance unless they believe the Medicaid cost trend (the most volatile variable in their business) is tracking predictably.

The Medicaid Problem: Still Present, Still Manageable

Medicaid has been the managed care industry’s central challenge since 2023. The unwinding of COVID-era continuous enrollment — which kept millions of people on Medicaid regardless of eligibility — created a massive re-determination wave. Healthier members left the rolls; sicker, higher-cost members remained. This structural shift pushed medical cost ratios above historical norms across the sector.

For Elevance specifically, the Medicaid benefit expense ratio remains elevated. CFO Mark Kaye was direct on the Q1 earnings call: “Underlying cost trend does remain elevated. The first quarter trend is consistent with our full year outlook. And we do continue to contemplate Medicaid trend at the high end of that mid-single-digit guidance range.”

“High end of mid-single-digit” means approximately 5–7% annual medical cost inflation in the Medicaid book. Premium rates, set by state contracts negotiated months in advance, may not keep pace with that rate of medical cost growth — which is why Medicaid margins have been structurally compressed. The response: negotiate better rates in 2026 contracts, exit markets where rates are inadequate, and use care management programmes to reduce unnecessary utilisation.

Elevance’s Medicaid membership declined Q1 2026 versus Q1 2025 — this is intentional, not a market failure. The company exited lower-margin Medicaid contracts in states where it couldn’t achieve adequate rate relief. Smaller but more profitable Medicaid membership is better than larger but loss-generating membership.

The offsetting positive: Medicare Advantage, which had been a problem for the whole industry in 2024, showed improved performance in Q1 2026. Elevance’s individual ACA (Affordable Care Act marketplace) business delivered “favorable claims experience and seasonality” — contributing to the EPS beat above consensus. The diversification across Medicaid, Medicare, and commercial means no single segment drives the entire company into distress.

The CMS Charge: What $935 Million Actually Means

The $935 million accrual is the headline risk for ELV in 2026. Understanding it requires some technical background.

Medicare Advantage plans (like Elevance’s MA plans) receive payments from CMS based on the health risk profile of their enrolled members. Sicker members generate higher CMS payments; healthier members generate lower payments. Plans submit risk adjustment data (diagnosis codes, clinical data) to support their payment rates. CMS periodically audits this data and can demand repayments if it finds the submitted data resulted in overpayments — a process called Risk Adjustment Data Validation (RADV).

The industry has been fighting CMS’s RADV audit methodology in court for years. In 2026, the regulatory environment shifted: CMS moved forward with its data reconciliation process for prior years, and Elevance booked a $935 million accrual representing management’s best estimate of the potential liability. Similar charges have appeared at other managed care companies.

The specific uncertainty management flagged: “the final amount will be determined through the resolution process.” This means:

• $935M might be settled at a lower amount if negotiations or appeals succeed
• $935M might increase if CMS’s data review reveals a larger variance
• Timeline for resolution is unclear — could span 2026 and into 2027

The most conservative scenario: the $935M settles at face value in 2026, creating a significant one-time cash drain. The most optimistic: it settles at 60–70 cents on the dollar, and the accrual reversal generates a ~$280–$375M Q3 or Q4 income benefit. The market is pricing in the worst-case version because the exact exposure is unknown.

Elevance Key Data (May 2026)

Sources: Elevance Health IR — ir.elevancehealth.com; Yahoo Finance — ELV; BusinessWire; SEC 8-K

The Carelon Play: Why the Rebrand Was Never Just Marketing

Elevance’s strategic identity depends on whether Carelon — the non-insurance health services umbrella — can generate meaningfully higher margins and growth rates than the insurance core.

CarelonRx (pharmacy benefits management): Direct pharmaceutical dispensing and PBM services. Revenue growing sequentially. Pharmacy margin is structurally higher than insurance margin because it’s volume-based, not risk-bearing. Every prescription filled by CarelonRx at controlled cost is a margin improvement over the pre-CarelonRx legacy arrangement where pharmacy benefits went through third-party PBMs.

Carelon Services (specialty clinical, behavioural health, home health): This is where the services-company re-rating thesis lives most concretely. Utilisation management, care coordination, and post-acute management services are reimbursed differently from insurance claims — they’re more like managed services fees, recurring and predictable.

The strategic bet: as Elevance integrates clinical management deeper into its insurance business, it reduces medical claims (through better care management) while generating separate services revenue from the same care activities. The member gets better clinical coordination; Elevance captures more margin per member.

How far along is this integration? Management describes it as a multi-year programme. Carelon Services contributed meaningfully to Q1 2026 operating results but specific segment EBITDA breakdowns aren’t always disclosed in granular form. The investment thesis requires trusting management’s trajectory description.

The AI transformation of healthcare administration is directly relevant to Elevance’s Carelon Services strategy — predictive care management, AI-driven prior authorisation review, and real-time clinical decision support are exactly the tools that reduce medical cost per member without reducing care quality. The HealthOS platform Elevance operates for data exchange is the infrastructure layer enabling this.

ELV Stock Price Target 2026

Post the Q1 2026 beat and guidance raise, the analyst consensus has shifted meaningfully positive. The average price target among 19 analysts is approximately $450–$480, implying 21–29% upside from current prices.

The specific catalysts for the remainder of 2026:

CMS charge resolution. Any news suggesting the $935M accrual settles at less than the booked amount would be an immediate re-rating catalyst. A $300M reversal on a $935M accrual is not far-fetched in regulatory settlement negotiations.

Medicaid rate cycle. If 2027 state Medicaid contracts come in at rates above the underlying cost trend (meaning states are finally catching up to medical inflation), the market will price this in well before the contracts take effect. Q2 and Q3 earnings calls will carry commentary on rate negotiation progress.

Share repurchases. $1.5 billion returned in Q1 alone, with FY2026 OCF of at least $5.5 billion. At current prices, that’s aggressive buybacks reducing the share count meaningfully — every share retired at $371 increases EPS on the remaining float.

Multiple expansion. The forward P/E of 13.9x on FY2026 guidance is genuinely cheap for a company with 15 Buy ratings, $5.5B+ in annual OCF, and a structural position in US healthcare that can’t be disrupted quickly. If the CMS overhang clears, a re-rating to 16–17x would put the stock at $430–$455 without any EPS growth beyond management’s current guidance.

The digital infrastructure buildout across US healthcare — including AI-driven analytics, data exchange, and payment integrity platforms — creates efficiency gains that directly benefit insurers and services companies with scale. Elevance’s HealthOS platform positions it to capture these gains structurally.

ELV Stock Price Target 2027–2030

Management has set a specific FY2027 expectation: “at least 12% adjusted EPS growth off a revised baseline of $25.75.” If FY2026 delivers $26.75 and FY2027 grows 12%, that’s approximately $30 adjusted EPS for FY2027. At 15x forward P/E — still a discount to the broader healthcare sector — that implies a stock price of approximately $450.

At 17x P/E (where diversified health services companies like UnitedHealth have historically traded during periods of stable Medicaid and Medicare rates), FY2027 earnings of $30 implies approximately $510.

The 2030 trajectory depends on Carelon’s ability to demonstrate the services-company margin profile. If CarelonRx grows to represent 20–25% of total operating income (versus a smaller share today) at margins meaningfully above the insurance segment, the market will re-rate ELV closer to a health services company — potentially 18–20x earnings. At $40 EPS in FY2029 (approximately 10% CAGR from FY2026) and 18x, that implies $720 — double the current price.

That scenario requires both earnings compounding and multiple expansion. The multiple expansion requires Carelon to deliver, which is a multi-year execution question.

The defensive case: even if ELV trades at 13–14x forever (insurance multiple, no re-rating), $40 EPS in 2029 implies $520–$560. That’s 40–50% upside from current prices on earnings growth alone.

The broader AI and quantum computing infrastructure buildout is reducing the cost of healthcare analytics at exactly the moment Elevance is trying to differentiate on data-driven care management. The data infrastructure and AI model deployment capabilities that companies like Palantir have built for government clients are now available for healthcare payers — and Elevance’s HealthOS data exchange platform positions it as a primary beneficiary.

Is ELV Worth Buying at $371?

The case for yes is unusually concrete for a large-cap stock.

The P/E of 14.7x is below the S&P 500 average, below the healthcare sector average, and well below comparable managed care companies. The company just raised guidance on a 14% adjusted EPS beat. It’s returning $1.5 billion per quarter to shareholders. It serves 118 million members. CarelonRx is growing. Medicare is improving. Management has a specific 2027 target of 12%+ EPS growth.

The case for caution is equally specific: the $935M CMS accrual has an uncertain final resolution. Medicaid cost trend remains elevated. Political risk around Medicaid funding is a live variable in 2026 (congressional budget discussions always create noise around managed care stocks). And the Carelon re-rating thesis requires years of execution that hasn’t yet materialised in the multiple.

Like other established infrastructure companies trading at discounts to their long-term earnings power, Elevance’s current valuation reflects specific, resolvable uncertainties rather than structural business deterioration. Oklo, Palantir, and other infrastructure plays face the same pattern — the market discounts near-term uncertainty and then re-rates when that uncertainty resolves.

The $26.75 FY2026 adjusted EPS guidance at 14x = $374. At 15x = $401. At 16x = $428. The stock at $371 is essentially pricing in the lowest end of reasonable multiples for a quality managed care business with 118 million members, a growing services arm, and $5.5 billion in annual OCF. Whether the market re-rates depends entirely on whether the CMS charge resolves cleanly — and on whether Medicaid rate commentary improves over the next two earnings calls.