Elevance Health Stock Jumps 6.1%: Will It Continue to Soar?

Elevance Health ELV shares ended the last trading session 6.1% higher at $538.48. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 3.5% loss over the past four weeks.

Elevance Health extended its rally for the second straight day, driven by continued optimism over its Health Benefits and Carelon businesses. Baird analyst Michael Ha also initiated coverage of the stock with an Outperform rating, which further drove the stock upward.

In Bernstein's 40th Annual Strategic Decisions Conference, ELV mentioned accelerating services and capabilities in its Carelon segment, which is expected to enhance its top line in the second half of 2024 and 2025. ELV's plans to scale acquired assets and the current repositioning of its health benefits business might have further led to optimism in the investor community. Investment in high-growth opportunities and margin expansion initiatives is likely to drive this stock higher in the future.

This health insurer is expected to post quarterly earnings of $10.02 per share in its upcoming report, which represents a year-over-year change of +10.8%. Revenues are expected to be $43.13 billion, down 0.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Elevance Health, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ELV going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold).

Elevance Health is part of the Zacks Medical Services industry. Teladoc TDOC, another stock in the same industry, closed the last trading session 0.4% lower at $11.24. TDOC has returned -13.1% in the past month.

Teladoc's consensus EPS estimate for the upcoming report has changed -1.6% over the past month to -$0.35. Compared to the company's year-ago EPS, this represents a change of +12.5%. Teladoc currently boasts a Zacks Rank of #3 (Hold).

To read this article on Zacks.com click here.