Elevance Health (NYSE:ELV) shares rose in the early session today after the health benefits services provider delivered a better-than-expected performance for the fourth quarter. Revenue jumped by 7% year-over-year to $42.5 billion, outpacing expectations by $310 million. In sync, EPS of $5.62 beat estimates by $0.02.
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For the full year, revenue rose by 9.3% to $170 billion, and EPS jumped by 16.2% to $33.14. The company’s top-line gains were attributable to premium rate adjustments to cover the medical cost trend. Further, days in claims payable declined by 1.3 days to 47.3 days. The operating expense ratio for the year increased by 40 basis points to 11.8% due to business optimization charges.
Notably, Elevance repurchased shares worth $2.7 billion in 2023. The company had $4.2 billion remaining under its current share repurchase authorization. Additionally, Elevance has increased its quarterly dividend by 10.1% to $1.63 per share. The company expects adjusted diluted EPS of $37.10 for Fiscal Year 2024. Growth in total operating revenue for the year is pegged at a flat to low-single-digit percentage.
Is ELV a Good Stock to Buy?
Today’s price gains build on the nearly 4.5% rise in Elevance shares over the past five sessions. Overall, the Street has a Strong Buy consensus rating on Elevance, and the average ELV price target of $569.60 implies a further 20.6% potential upside in the stock.
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