DCF Studio

    ELV · NYQ · Healthcare

    Elevance Health, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 646.46

    Market price

    USD 413.60

    Implied upside

    +56.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.69% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 646.46+56.3%
    Exit multiple
    USD 569.30+37.6%
    Market price
    USD 413.60

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn8bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 198.8bnUSD 203.7bnUSD 208.8bnUSD 213.9bnUSD 219.2bnUSD 224.7bnUSD 230.3bnUSD 236.0bnUSD 241.9bnUSD 247.9bn+2.5%
    EBITUSD 9.8bnUSD 10.0bnUSD 10.3bnUSD 10.5bnUSD 10.8bnUSD 11.1bnUSD 11.3bnUSD 11.6bnUSD 11.9bnUSD 12.2bn+2.5%
    NOPATUSD 7.7bnUSD 7.9bnUSD 8.1bnUSD 8.3bnUSD 8.5bnUSD 8.7bnUSD 9.0bnUSD 9.2bnUSD 9.4bnUSD 9.7bn+2.5%
    Add depreciation & amortisationUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bn+2.5%
    Less capital expenditureUSD -2.0bnUSD -2.2bnUSD -2.5bnUSD -2.8bnUSD -3.0bnUSD -3.3bnUSD -3.6bnUSD -3.9bnUSD -4.3bnUSD -4.6bn+9.8%
    Capex, % of revenue1.0%1.1%1.2%1.3%1.4%1.5%1.6%1.7%1.8%1.9%-
    Less increase in working capitalUSD -23.8mUSD 419.4mUSD 430.5mUSD 442.0mUSD 453.7mUSD 465.8mUSD 478.2mUSD 490.9mUSD 504.1mUSD 517.6m-
    Free cashflow to firmUSD 7.5bnUSD 8.0bnUSD 8.0bnUSD 8.0bnUSD 8.0bnUSD 7.9bnUSD 7.9bnUSD 7.9bnUSD 7.9bnUSD 7.8bn+0.4%
    Discount factor0.96630.90220.84230.78640.73430.68560.64010.59760.55800.5210-
    Present valueUSD 7.3bnUSD 7.2bnUSD 6.7bnUSD 6.3bnUSD 5.8bnUSD 5.4bnUSD 5.1bnUSD 4.7bnUSD 4.4bnUSD 4.1bn-
    Present Value Of The ForecastUSD 57.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.749Reported 0.626, pulled toward 1.0 (Blume)
    Cost of equity8.06%Risk-free + beta x equity risk premium
    Cost of debt5.59%Risk-free + 70bp, the spread for a A+ rating at 5.8x interest cover. Book interest / average debt was lower, at 4.4%.
    Market capitalisationUSD 89.7bn73.7% of capital
    Total debtUSD 32.0bn26.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.10%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 646.46

    60% of EV

    Forecast FCFF, final year
    USD 7.8bn
    Capex at depreciation, working capital in reinvestment
    USD 9.7bn
    Less reinvestment at g/ROIC (24.2% of NOPAT)
    USD -2.3bn
    Capitalised
    USD 7.3bn
    ROIC (reported)
    10.3%
    Terminal value, undiscounted
    USD 162.8bn
    Terminal value, discounted
    USD 84.8bn
    Enterprise value
    USD 141.9bn
    Less net debt
    USD -3.3bn
    Equity value
    USD 145.2bn

    Exit at 8.9x EBITDA

    Value per shareUSD 569.30

    54% of EV

    Terminal value, undiscounted
    USD 129.5bn
    Terminal value, discounted
    USD 67.5bn
    Enterprise value
    USD 124.5bn
    Less net debt
    USD -3.3bn
    Equity value
    USD 127.9bn

    Spread between methods: 13%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.10%949.901007.751089.991213.991418.79
    6.10%753.96776.65807.12849.12909.29
    7.10%627.67635.65646.47661.15681.30
    8.10%539.41540.51542.66546.17551.48
    9.10%474.19471.88469.92468.36467.34

    Outlined: this model. Green text: above today's price of 413.60. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.3%2.2%-2.4%
    EBIT margin5.4%4.9%3.1%
    Discount rate-7.1%10.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.