8 Most Undervalued Value Stocks To Buy According To Analysts

2. Elevance Health, Inc. (NYSE:ELV)

Average Upside Potential: 36.27%

Forward P/E: 10.34

EPS Growth This Year: 10.70%

Number of Hedge Fund Holders: 73

Elevance Health, Inc. (NYSE:ELV) is an American healthcare company that supports health at every life stage through its family of companies. The firm offers health plans and behavioral, clinical, pharmacy, and complex-care solutions to promote whole health. Elevance’s purpose revolves around improving humanity’s health.

Elevance Health has nearly 46 million total medical members in affiliated health plans and serves more than 113 million total lives. The firm has a strong brand portfolio encompassing Anthem and Wellpoint as the health plan brands which cater to 34 million and 2.2 million people respectively. Simultaneously, the health services business has over 75 healthcare partners. The balance and resilience of the firm’s complementary businesses have helped it navigate different macroeconomic environments. Elevance has a robust strategy of expanding its core business in commercial, Medicare, and Medicaid and investing to grow in specialized populations. At the same time, it focuses on growing Carelon through scaling best-in-class solutions to deliver whole health.

The power of Elevance’s diversified business was evident in the second quarter results. The firm reported 2Q 2024 diluted EPS of $9.85, up 26% year-over-year. Health Benefits showed resilience in Q2 with a strong growth in ACA health plan membership. In Health Services, Carelon services delivered a robust growth in operating revenue. Operating revenue for Carelon recorded an increase of $1.2 billion or 10% as compared to the prior year period.

In conclusion, Elevance’s strategy of optimizing the core while investing in growth tends to drive a long-term growth algorithm. The firm has a clear growth trajectory over the long term as it targets at least 12% average annual growth in adjusted diluted EPS.