Elevance Health Delivers Strong End to 2022 and Guides to Solid 2023; Shares Fairly Valued

Elevance Health delivered a strong fourth quarter that helped the firm mildly exceed our expectations. Also, the company set initial guidance for 2023 that looks slightly above our expectations. However, at first glance, minor changes to our near-term estimates have not materially changed our $478 fair value estimate. Our narrow moat rating appears intact, too, and although Elevance remains the U.S. market leader, its narrow moat rating is primarily based on the company's local scale leadership that helps it offer lower premiums than most health insurers. The recently announced acquisition of another Blue Cross Blue Shield licensee (in Louisiana) looks likely to bring another local market share leader into the fold, too, if approved by antitrust regulators.