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Opinions Paul MacDonald
Elevance Health IncELVTOP PICKMay 09, 2023
Paul MacDonaldStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Out of favour in 2023. Healthcare is one of the areas where he expects the rotation to go, big opportunity. Stock's flat for last 2 years, but EPS is up 27%. 15x PE this year, 13.5x next year. Estimates of double-digit revenue growth and 15% annual earnings growth. The insurers, in particular, are ripe for a rebound. Yield is 1%.
(Analysts’ price target is $558.02)
Gordon ReidContinues to like it. Healthcare has been in the penalty box the past year. ELV was Anthem. It insures 48 million Americans. Growing 15% annually, but trades at only 14x earnings.
Gordon ReidInsurer margins squeezed as procedures delayed by Covid now go ahead. Market's overreacted to this. Still a good long-term hold. Confident in management. Over next 5-10 years, healthcare spending will be double GDP growth.
Gordon ReidExcellent business with good long term prospects.
Very strong balance sheet.
Large health insurance company with ~45M customers.
Strong management team that is good at running business.
Gordon ReidHealthcare notoriously left out of most recent high-beta rally. Don't give up. Don't chase low-quality, high-beta companies just because they're going up for 6 weeks. Go with good quality companies, and you will be rewarded. He's sticking with it. Demographic tailwind, 6% FCF yield, expects $33 EPS in 2023 which is a 15x PE.
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Alex RuusGordon Reid
It is both a growth and value stock being a health insurer for corporations. It also provides management for the Federal Government through Medicare and Medicaid as well as its own networks. It is slowly becoming more vertically integrated. Being more on the defensive side it helps to balance his portfolio. Buy 21 Hold 4 Sell 0