Morgan Stanley analyst Erin Wright downgraded Elevance Health (ELV) to Equal Weight from Overweight with a price target of $388, down from $551. Year-to-date enterprise medical loss ratio has come in higher than expectations, in “no small part” due to the acuity-rate mismatch dynamic that is impacting Managed Medicaid players, notes the analyst, who sees continuing cost trend headwinds into 2025. With uncertainty around the timing of normalization and incremental pressure in Medicare Advantage, the firm believes “it is prudent to step back until proof points begin to come in throughout 2025,” the analyst tells investors.
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