Jan. 8 at 6:42 PM
Wolfe Research upgraded the managed care healthcare sector to Outperform, arguing that discounted valuations and a likely earnings trough in 2025 have created a “compelling” entry point. Analyst Justin Lake said the group is positioned for a multi-year recovery, with 2025 expected to mark a bottom for both margins and earnings, excluding HUM Stars-related issues.
Wolfe sees improving risk-reward dynamics across the sector, supported by updated 2026 price targets and a reassessment of long-term earnings power. Confidence is growing around a return to normalized profitability over time.
Lake also upgraded Elevance Health, expecting conservative 2026 EPS guidance roughly in line with a
$25.50 estimate, including a 200-basis-point year-over-year decline in Medicaid margins, which should materially limit downside risk.
$ELV $HUM