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US Equities · Finance research note

ELV — Elevance Health

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 5.3%
Profit Margins 2.62%
Return on Equity 12.09%
Return on Assets 3.98%
Free Float 0.22B
Dividend Yield 1.78%
Short Int % Utilisation 3.4%

2.2 Growth

Metric Value
Revenue Growth 2.6%
Free Cash Flow 4.3B
EBITDA 9.69 (Ratio)
Enterprise Value 82.76B
EV/Revenue 0.41
EV/EBITDA 9.69

Revenue growth of 2.6% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 41.37%
Risk / Std Dev (Ann.)* 35.15%
1-Year Price Return* 32.03%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $400.32
52-Week Range $274.84 – $436.24
Observation Count 248 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $199.12B $176.81B
Net income Reported net income $5.66B $5.98B
Total assets Year-end reported balance $121.49B $116.89B
Shareholders’ equity Year-end reported balance $43.88B $41.31B
Net margin Net income ÷ revenue 2.84% 3.38%
Asset turnover Revenue ÷ total assets 1.6390x 1.5126x
Equity multiplier Total assets ÷ shareholders’ equity 2.7687x 2.8292x
ROE Net margin × asset turnover × equity multiplier 12.90% 14.47%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $199.12B
Prior annual revenue $176.81B
EBIT $8.11B
Tax rate 15.60%
NOPAT = EBIT × (1 − tax rate) $6.85B
Forecast start-growth basis 12.62%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $6.85B
Add: depreciation & amortisation $1.55B
Less: capital expenditure -$1.12B
Less/(add): working-capital cash-flow movement -$3.28B
Current unlevered FCFF $4.00B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 12.62% $7.71B $1.74B -$1.26B -$3.69B $4.50B $4.35B
2 10.09% $8.49B $1.92B -$1.52B -$4.06B $4.83B $4.35B
3 7.56% $9.13B $2.06B -$1.78B -$4.37B $5.05B $4.24B
4 5.03% $9.59B $2.17B -$2.01B -$4.59B $5.15B $4.03B
5 2.50% $9.83B $2.22B -$2.22B -$4.70B $5.12B $3.74B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.69
Cost of equity 8.52%
Pre-tax cost of debt 4.43%
WACC 7.23%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $111.16B
Implied terminal EV / EBITDA 8.02x
Terminal value as % of enterprise value 79.11%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $20.71B
Present value of terminal value $78.43B
Indicated enterprise value $99.14B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $99.14B
Less: gross interest-bearing debt $32.05B
Add: cash and equivalents $35.38B
Add: affiliate investments $0.00
Less: minority interests $144.00M
Indicated common equity value $102.33B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 224,600,000.00
Share-count basis reported diluted weighted-average shares
Current market price $398.44
DCF indicative value per share $455.59
Indicative value vs. market price 14.34%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 2/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:31:36.159165 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 13.79% 18.78%
Adjusted R² 0.03 0.03
Annualised residual volatility 33.25% 33.18%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.46 (2.34) 0.55 (2.46)
Size (SMB) 0.13 (0.51) 0.10 (0.36)
Value (HML) 0.48 (2.10) 0.34 (1.21)
Profitability (RMW) NM 0.12 (0.51)
Investment (CMA) NM 0.28 (0.68)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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