Elevance Health

Elevance Health (Elevance) is one of the largest health insurers in the US, serving approximately 46m members. The healthcare industry is currently going through a tough period as utilisation has increased with lagging price adjustments, therefore leading to what we deem to be cyclically low margins for Elevance, due to elevated medical loss ratios. This has been further compounded by significant regulatory noise which, based on our analysis, won’t have a material impact on Elevance. Both of these factors have created what we deem short-term cyclical headwinds allowing us to purchase the business on 9x forward earnings, which should grow at a high teens rate as margins normalise.

Insights Disclaimer